The Governor of the People’s Bank of China (PBoC) has said it is open to digital currencies that don’t disrupt the financial system.
Speaking at a news conference on the sidelines of the National People’s Congress in Beijing on Friday, Zhou Xiaochuan, the Governor of the PBoC, said that it would accept cryptocurrencies that ‘bring efficiency, low cost and safety’ to consumers as long as they ‘don’t directly conflict with the current financial stability and financial order,’ reports the South China Morning Post.
“We don’t want to create products for speculation … the illusion of getting rich overnight is not a good thing. Bitcoin and other similar products have been launched too quickly but not cautiously … their rapid proliferation may have a big negative impact on consumers. These products have an unpredictable effect on … monetary policy.”
Last year, China undertook a major crackdown on cryptocurrency exchanges, as it attempted to rein in the market, banning their operation within the country. As a result, market prices slumped. Following the iron fist approach last September, the PBoC announced in February that it would ban domestic and overseas websites linked to digital currency and ICO trading. By doing this it’s aiming to curb the speculative market which has helped to fuel prices.
According to the report, the bank is working at creating a ‘sovereign digital currency,’ enabling electronic payments to be made based on existing banknotes and coins. It adds that this wouldn’t change the position of the central or commercial banks.
Xiaochuan said that the central bank has set up a digital currency research centre, stating that technological developments should be maintained as long as they serve the economy.
“For us, the direction of virtual assets requires caution … from China’s perspective, virtual asset transactions are not in line with our idea that finance must serve real economic growth. For now we don’t recognise bitcoin, or any digital currency, as a retail payment method – as banknotes, coins or credit cards.”
Even though the PBoC has spoken out against the cryptocurrency market in the past, many Chinese investors still remain interested in the industry. Prices have fallen this week amid announcements from the U.S. Securities and Exchange Commission (SEC) and Japan’s Financial Services Agency (FSA); however, a survey by consumer product and services comparison website Finder suggests that bitcoin will rise to $29,000 by the end of the year.