China’s central bank is now saying that bitcoin is an “investment alternative” — marking a huge change in Beijing’s tone after their recent crackdown on cryptocurrency issuance almost four years ago.
Insiders said the comments were “progressive” and are watching for any changes made by the People’s Bank of China (PBOC).
“We see Bitcoin as a crypto asset … It is an investment alternative., Li Bo, deputy governor of the PBOC, stated on a CNBC panel.
“It is not currency per se. And so the main role for crypto assets we see going forward is as an investment alternative.”
China was once among the world’s biggest buyers of bitcoin. However, in 2017, China blocked so-called initial coin offerings. Officials then shut down crypto-exchanges. The moves were a response to concerns about financial stability.
As investment alternatives, “many nations are still investigating what type of regulatory requirements are needed. Maybe minimal, but we must have some kind of requirement to prevent … the speculation of assets to produce financial stability problems., Li said. He then added that the bank will maintain its current crypto regulations.
Flex Yang, CEO of Babel Finance, called his comments “progressive” during an interview with CNBC on Monday.
“I believe it is very significant and is different from their past statements on cryptocurrencies., Vijay Ayyar, of cryptocurrency exchange Luno, said to CNBC via email.
Bitcoin seems to now be more mainstream and has gained the trust of institutional investors. Major corporations like Tesla and Square have bought large sums of bitcoin. The value of bitcoin has risen by 95% this year and just last week, the cryptocurrency reached a new record high over $64,000.
“Governments are seeing that it is a growing but established asset and that regulation is needed. China regulating crypto would be a boost to cryptos in China and around the world., Ayyar said.
China is also currently working on its own digital currency which will be managed by the PBOC. The goal is to replace cash in circulation.