Deputy Governor of the People's Bank of China: Cryptographic assets can become investment tools or alternative investments, but they require regulatory oversight.
According to Chinese media reports, Li Bo, recently appointed as the Vice President of the People's Bank of China (PBoC), spoke about the benefits of cryptocurrency as an investment tool during the Boao Forum for Asia yesterday, emphasizing the regulatory uncertainty surrounding digital assets.
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Cryptocurrency as an Investment Option
When asked about the regulatory issues surrounding cryptocurrencies, Li Bo, Deputy Governor of the People's Bank of China, seemed to acknowledge the value of cryptocurrencies as assets, stating in an interview:
"Cryptocurrency is an investment option, it is not a currency itself, but an alternative investment. The main role that cryptocurrencies may play in the future is as an investment tool or alternative investment."
China's blockchain self-media Wu Shuo Blockchain also pointed out that this is the first time the Chinese government has recognized the asset value of cryptocurrencies.
Breaking: Li Bo, deputy governor of the Central Bank of China, said that crypto assets such as Bitcoin should be used as investment tools or alternative investments. This is the first time that the Chinese government has recognized the asset value of cryptocurrencies. pic.twitter.com/bgDIVA1eMJ
— Wu Blockchain (@WuBlockchain) April 18, 2021
However, many countries, including China, are currently studying relevant regulatory policies regarding using cryptocurrencies as an investment tool. Li Bo emphasized that although the regulatory requirements for cryptocurrency may be minimal, regulations are still necessary. Regarding stablecoin regulation, Li Bo stated that it may require stricter regulations than cryptocurrencies:
"In the future, if any stablecoin wishes to become a widely used payment tool, it must accept strict regulation, just like banks or quasi-banking financial institutions are subject to strict regulation."
Digital Assets Should Serve the Real Economy
On the same day, Zhou Xiaochuan, former Governor of the People's Bank of China, also discussed Bitcoin at an event, but his comments on Bitcoin were relatively conservative. Zhou Xiaochuan pointed out that many things in the modern financial system have detached from the real economy, such as shadow banking, derivatives, which are purely speculative transactions between financial institutions and have no direct connection to the real economy, making it prone to problems.
Zhou Xiaochuan stated that for digital assets like Bitcoin, it is not yet time to draw conclusions, but "we must be cautious." In China, any financial innovation must clearly demonstrate its benefits to the real economy.