China may be softening its tone on cryptoassets, almost four years after it exacted a crackdown on bitcoin (BTC), altcoins and crypto exchanges, with encouraging remarks from Li Bo, the new deputy governor of the central People’s Bank of China (PBoC).
Li Bo was quoted by multiple media outlets, including CNBC and the South China Morning Post as making remarks about BTC, stablecoins and central bank digital currencies (CBDCs) at the Boao Forum for Asia, which was held in Hainan, China, on Sunday.
The deputy governor, who worked at the PBoC for 14 years prior to taking on the role of vice mayor of Chongqing in 2018, was appointed to his new post at the central bank last week. In his first major speech in his new post, he stated,
“We regard bitcoin and stablecoin as crypto assets. […] These are investment alternatives. They are not currencies per se. […] The main role we see for cryptoassets going forward, […] is [as an] investment alternative.”
“Many countries, including China, are still looking into [crypto] and thinking about what kind of regulatory requirements [are required]. Maybe [these will be] minimal, but we need to have some kind of regulatory requirement to prevent […] speculation with these assets [that] create any serious financial stability risks.”
The comments will raise eyebrows both domestically and abroad. Bitcoin’s popularity is still sky-high in China, despite the fact that many traders struggle to access markets. Regardless, over-the-counter trading interesr remains sky high, and the Chinese authorities have been keen to point out in the past that they never actually banned the token.
Li Bo also spoke in detail about the PBoC’s digital yuan plans, and reaffirmed the central bank’s intention to ensure the token is up and running in time for the 2022 Winter Olympics – to be held in Beijing in February.
“For the upcoming Beijing Winter Olympics, we were trying to make [the digital yuan] available not only to domestic users, but also to international athletes and [spectators].”
The PBoC earlier this month announced that more regions – including Shanghai – had been added to the digital currency’s pilot.
But the deputy governor downplayed assertions that the digital yuan was being rolled out as part of a wider plan to purge the USD from its economy and those of its trading partners.
“Our goal is not to replace the USD or any other international currency. Our goal is to allow the market to choose and to facilitate international trade and investment.”
The former Governor of the PBoC, Zhou Xiaochuan, speaking at the same event, did hint however that the digital yuan was being developed with an eye on the international stage.
“Our focus […] is that we want to establish a very solid domestic digital yuan first, and build up a healthy ecosystem, at the same time working with our international partners. Hopefully, in the long term, we’ll have a cross-border solution as well.”
But he also added: “We must respect the monetary sovereignty of other countries’ central banks. Using digital technology can greatly improve convenience, but it is not a way to dominate the world with a single currency.”
Li again refused to put a timeline on a full national rollout, claiming that a number of technological issues still had to be resolved prior to launch.