The outgoing head of China’s central bank recently directed some harsh words at cryptocurrencies.
“We do not currently recognize Bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments,” Zhou Xiaochuan, then governor of the People's Bank of China, told reporters at the Two Sessions last month. “The banking system does not accept it.”
He also told reporters, “We don’t like speculative cryptocurrency products since it is not a good thing to give people an illusion of getting rich overnight,” according to People’s Daily.
Though harsh, the comments fall short of a threat to ban Bitcoin and they follow the spirit of Zhou’s comments at the 2014 Boao Forum for Asia. There he stated: “It is out of the question of banning bitcoin as it is not started by [a] central bank … Bitcoin is more a kind of tradable and collectible asset, such as stamps rather than a payment currency.”
Zhou Xiaochuan, image via Wikimedia Commons
If the bank's deputy, Pan Gongsheng, is to be believed, a ban would be unnecessary: Bitcoin will just die on its own.
Speaking to Sina in December 2017, Pan remarked: “As Keynes has taught us, ‘the market can remain irrational longer than you can remain solvent.’ There is only one thing left to do: sit by the river bank and see Bitcoin’s body pass by one day.”
READ MORE: China’s Cracking Down on Bitcoin Miners
At last month's meeting, Zhou also warned against the private development of blockchain technology – the “distributed ledger” that shares cryptocurrency transactions in a transparent, unchangeable record.
“If they spread too rapidly, it may have a big negative impact on consumers," Zhou was quoted as saying. "It could also have some unpredictable effects on financial stability and monetary policy transmission."
Instead, the PBOC is reportedly working with OKCoin on a state-backed 'Digital Currency Electronic Payment' project. Zhou called it “inevitable,” though it would have to be structured in a way that prevented speculation.
“The emphasis should be to serve the real economy,” he remarked, adding that the new digital currency must “not conflict with the current financial order.”
Zhou’s replacement at the PBoC, Yi Gang, has offered mildly warmer sentiments on Bitcoin in the past. In 2013 he reiterated the position that the bank could never recognize Bitcoin as a payment method, but it’s “inspiring” how the cryptocurrency allows ordinary people to participate.
Yi Gang, image via Wikimedia Commons
Yi has yet to elaborate his thoughts on virtual currency since his appointment late last month.
READ MORE: Virtual Gold – Why Beijing Is Leading China’s Bitcoin Revolution
[Top image via Antana/Flickr]
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