China: for the PBOC Bitcoin is an “Investment Alternative”. Why this opening?
In a dramatic and material shift in Beijing's tone following a crackdown on cryptocurrency issuance and trading nearly four years ago, CNBC reported that China's central bank (PBOC) is now calling bitcoin an "investment alternative. ".
Industry insiders have called the comments "progress" and are closely watching any regulatory changes made by the People's Bank of China. Here is the link to the video with the news
"We consider Bitcoin and stablecoins as assets related to the cryptographic tool … These are investment alternatives ," said Li Bo, deputy governor of the PBOC, during a panel hosted by CNBC at the Boao Forum for Asia on Sunday.
“ They are not currency per se. And so the main role we see for crypto assets in the future, the main role is the investment alternative, ”he added.
While in 2017 China was the world's largest bitcoin market as local savers and speculators used cryptocurrency to bypass the "Great Wall of Capital Movements". Beijing promptly cracked down on this practice and not only banned so-called ICOs, initial coin offerings, but also shut down the local virtual currency market and all China-based exchanges. All this had been justified with the desire not to destabilize finance with an object that was valued, more or less, as a half-scam. This meant that the beating heart of virtual currencies left the Far East, also due to the restrictive attitude of South Korea, and moved to the USA and the West.
The PBOC pointed out that some form of regulation, even minimal, is required before accepting Bitcoin again, but it is a major twist. What could have prompted the PBOC, that is a branch of the Communist Party government, to make this change?
Here are some hypotheses:
- favoring an outflow of capital at a time of strong current account surplus which, otherwise, would have led to a revaluation of the Yuan, with what follows for exports and competitiveness. In this case, a stateless currency is then favored, so no financial gifts are given to the US opponent;
- accustom people to the use of digital currencies near the release of the digital Yuan, and make it more acceptable by hiding its insides, such as perfect programmability and traceability;
- regain control, as far as possible, of this branch of modern finance, throwing a beam between the legs of the USA:
For now, Bitcoin has not been affected in its quotations, and is still recovering from the latest flashcrash, but if Chinese capital were to return it would bring new life to virtual currencies.
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The article China: for the PBOC Bitcoin is an "Investment Alternative". Why this opening? comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cina-bitcoin-e-una-alternativa-di-investimento-perche-questa-apertura/ on Mon, 19 Apr 2021 17:44:14 +0000.