The central bank of China seems to have shifted its tone this time towards bitcoin after considering it to be an "investment alternative." Besides, the Chinese government official said that the crypto assets will likely accelerate after clarifying that it is not a currency by itself.
Because of this sudden statement, it was now being watched closely for some changes which might happen. What pushed China bank to release a surprising bitcoin comment despite the crypto crackdown that happened in 2017.
PBOC Says Bitcoin is Crypto Asset and an Alternative in Investment
The People's Bank in China (PBOC) now regarded the said cryptocurrency as a true asset. PBOC's deputy governor, Li Bo shared that they are "investment alternatives" during a panel interview with CNBC at the Boa Forum for Asia.
Despite the banning of initial coin offerings (ICOs) in 2017, China has once transformed into one of the most massive bitcoin buyers globally.
At 12:25 pm Beijing time, the value of Bitcoin has skyrocketed at an approximate 2%, as per data provided by Coindesk.
ICOs were headed to initiate money-raising activities for those firms that handle cryptocurrencies. This is done by issuing digital tokens.
However, final instability would likely hit the economy at the time after the closing of local cryptocurrency exchanges in the same year. This has sparked many concerns that the crackdown could cause a lot of trouble in finance.
Li's statement not only suggests how the Chinese bank views bitcoin at the moment but also their "change of heart" to shift gears in cryptocurrency ideals.
Moreover, China together with other countries is now exploring what regulatory requirements could happen upon considering bitcoin as an investment alternative.
Babel Finance founder Flex Yang referred to the comments as "progressive," while Luno business development head, Vijay Ayyar said in a CNBC email that the PBOC is quite significant and is now contrasting to what they commented about cryptocurrencies over the past years.
China is Currently Developing Own CryptoCurrency
In the United States, huge tech companies like Tesla have already invested in bitcoin acquisition. Around the globe, bitcoin seems to be far from over, since many investors eye it for their financial stability despite Ray Dalio's prediction of a bitcoin ban in the US.
Last week, bitcoin hit an impressive record of over $64,000 which accounts for a 95% increase this 2021.
In another statement, Ayyar spoke that what China is doing to its cryptocurrency will provide an industry boom around the globe. This is also in line with the achievement of the government to grow through purchasing its assets.
At the moment, China seems to be creating digital yuan, its own digital currency. The difference of it from bitcoin is its purpose of not being a cryptocurrency.
PBOC targets it to be a replacement of cash and coins which are presently in the economic circulation.
By the 2020 Beijing Winter Olympics, Li stated that the digital yuan could undergo significant trials involving foreign investors. Currently, China seems focused on conducting a series of digital currency tests in its major cities.
Despite its drop earlier this week, bitcoin will still be a hyped trend in virtual trading.
This article is owned by Tech Times
Written by Joen Coronel