PBoC Deputy Governor Interview - Advantages & Regulatory Clarity Around Digital Assets.

PBoC Deputy Governor Interview - Advantages & Regulatory Clarity Around Digital Assets.

2021-04-19 | Big Bob

PBoC Deputy Governor Interview - Advantages & Regulatory Clarity Around Digital Assets.

The recently appointed deputy governor of the PBoC [People’s Bank of China] - Li Bo, reportedly spoke on the advantages of cryptocurrencies as an investment tool while highlighting regulatory uncertainty within the country around the virtual assets. In line with the Chinese journalist Colin Wu, Li made the comments at the Boao Forum in southern China earlier on Sunday. The PBoC head revealed that there are still regulatory risks for the financial institutions, citing its earlier ban on ICOs [Initial Coin Offerings] and cryptocurrency exchanges. Li reportedly outlined that the PBoC will “continue to take care of the present measures and practices” as it explores any potential change in regulation, but appeared to recognize the investment potential of crypto.
“We believe that Bitcoin and stablecoins are encrypted assets,” explained Li. “Encrypted assets are an investment option, not the currency itself. It's an alternate investment, not the currency itself. Therefore, we believe that cryptocurrencies should play a serious role within the future, either as an investment tool or as an alternate investment.”
The PBoC deputy governor explained that stablecoins issued by private firms may require “stronger regulatory rules” than Bitcoin [BTC], saying:
“In the longer term, if any stablecoin hopes to become a widely used payment tool, it must be subject to strict supervision, a bit like banks or quasi-bank financial institutions are subject to strict supervision.”
Li, one among seven deputies to PBoC governor Yi Gang as well as former vice mayor of the Chinese municipality of Chongqing, is seemingly taking a stronger position for the financial institution to acknowledge crypto as a store of value. His appointment as deputy governor was announced last week. His comments come alongside former PBoC president Zhou Xiaochua, also attending at the Boao Forum, who appeared to make a distinction between the “real economy” and therefore the one within which digital currencies play a role: “Finance is to serve the important economy. Whether it's a digital currency or digital assets, it should be closely integrated with the important economy and serve the existing economy.” China’s central bank is presently moving forward with piloting its digital yuan project primary proposed earlier in 2014, now testing the digital currency in major cities across the country. Li added that the PBoC would be "focusing totally on domestic use" for the digital yuan, adding that China might consider cross-border payments and transactions "in the mere future." The country is reportedly getting ready to put the digital currency into use at the 2022 Winter Olympic Games in Beijing.

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