China- Central Bank of China is calling the bitcoin which is an “investment alternative”. This marking a significant shift in Beijing’s tine after a crackdown on cryptocurrency issuance and the trading was almost four years ago.
Industry insiders have now called the comments “progressive” and are now watching closely for the regulatory changes which are made by the People’s Bank of China. (PBOC)
Li Bo, who is the deputy governor of the PBOC mentioned on Sunday during the panel hosted by CNBC, “We regard Bitcoin and stablecoin as crypto assets … These are investment alternatives. “They are not currency per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.”
Bitcoin was almost around 2% at 12:25 p.m. Beijing time is more than $57,134.04 as per the COindesk data. China was once the world’s largest buyer of bitcoins. In 2017, China banned so-called initial coin offerings. This is effective to raise money for crypto companies by issuing digital tokens. However, in the same year, the authorities have shut down cryptocurrency exchanges. Further, the moves were prompted by concerns regarding financial stability.
Li mentioned, “many countries, including China, are still looking into it and thinking about what kind of regulatory requirements. Maybe minimal, but we need to have some kind of regulatory requirement to prevent … the speculation of such assets to create any serious financial stability risks.” He even added that the central bank will be keeping its recent regulations on cryptocurrencies.
Li’s latest comments highlighted a potential shift in tone from the PBOC. CEO and founder of Babel Finance, Flex Yang has called the comments “progressive” in an interview with the news reporter on Monday. Basically, Finance is a crypto-financial services company.
Head of the business development at cryptocurrency exchange Luno, Vijay Ayyar mentioned, “I think it is quite significant and is definitely different to their previous statements or positions on public cryptocurrencies.”
Bitcoin has now become the mainstream in most of the financial world and has now gained the interests of institutional investors. Although, the major corporations like Tesla and Square in the U.S. spoke about the purchase of large sums of bitcoin. However, the price of the bitcoin is almost 95% this year and the last week. The cryptocurrency has touched the highest record of more than $64,000.
This is an all-time high when compared with the coincided that is in the direct listing of cryptocurrency exchange Coinbase. This is what the investors have called a “watershed” moment for the industry.
Ayyar also said, “Governments are realizing that it is a viable and established, yet growing, asset class and need to regulate it. China regulating crypto would be another massive boost to the industry in China and globally.”
Now, China is working on the own digital currency which is called the digital yuan. Well, this is not a cryptocurrency and it is quite different from that of bitcoin. Soon it will be issued by the PBOC. The primary is to replace the cash and coins in circulation.
Recently, China is carrying out several tests with digital currency in some of the major cities. Li exclaimed that the Central bank may trial the digital yuan with the foreign visitors at the 2022 Beijing Winter Olympics.