The Central Bank of China has released a statement in which it called Bitcoin an “investment alternative.”
The governor of the People’s Bank of China (PBoC), Li Bo, recently spoke at an economic conference about cryptos:
“We regard bitcoin as crypto assets. Crypto assets are investment alternatives, and they are not a currency per se. The main goal we see for crypto assets is mainly investment alternatives.”
This marked the first time in which a high-rank Chinese regulator has referred to Bitcoin as being an investment and has distinguished it from its currency use.
For several years now, PBoC has positioned itself against crypto in the economy due to its use in illegal activities. Chinese regulators banned ICOs in 2017, and in 2018, they banned crypto trading completely.
There have been several reports in which it was claimed that stablecoins such as Tether (USDT) have been used on a large scale in the country for illegal gambling and money laundering.
As a result of crypto remaining popular, China started the digital yuan program.
Li has suggested that the central bank is more focused on private-issued stablecoins and has mentioned that they need better and stronger regulations than BTC.
“Going forward, any stable coin which has the ambition to become widely accepted payment solution will need very strong regulation, same as a quasi-bank to serve that kind of function.”
Analysts believe that a stablecoin ban is more possible than a Bitcoin one. And that ban may come sooner than we think:
“The reason this ban might happen in this decade is due to fact that the adoption of stablecoins occurs underground, they might be used for capital flights and therefore could represent a threat to Digital Yuan efforts if the financial activity of stablecoins occurring in China reached significant volumes going forward.”
Li also mentioned that the speculative nature of crypto poses a threat to China’s economic stability.
Nevertheless, let’s not forget that, despite the ban on crypto trading, China is the leader in mining crypto – over half of the hash power on the Bitcoin network comes from China.