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According to the central bank official, stablecoins issued by private entities could be subject to “stronger regulatory rules” than Bitcoin.
Li Bo, the newly named deputy governor of the People’s Bank of China, or PBoC, is said to have discussed the advantages of cryptocurrency as an investment vehicle while emphasising regulatory confusion in the country around digital assets.
According to Chinese journalist Colin Wu, Li made the comments at the Boao Forum in southern China on Sunday. The PBoC head said there are still regulatory risks for the central bank, citing its previous ban on initial coin offerings and cryptocurrency exchanges. Li reportedly said the PBoC will “continue to maintain the current measures and practices” as it explores any potential change in regulation, but seemed to recognize the investment potential of crypto.
“We believe that Bitcoin and stablecoins are encrypted assets,” said Li. “Encrypted assets are an investment option, not currency itself. It is an alternative investment, not currency itself. Therefore, we believe that crypto assets should play a major role in the future, either as an investment tool or as an alternative investment.”
The deputy governor of the PBoC also said that stablecoins released by private corporations may require “stronger regulatory rules” than Bitcoin (BTC), saying:
“In the future, if any stablecoin hopes to become a widely used payment tool, it must be subject to strict supervision, just like banks or quasi-bank financial institutions are subject to strict supervision.”
Li, one of seven deputies to PBoC governor Yi Gang and former vice mayor of the Chinese municipality of Chongqing, is seemingly taking a stronger position for the central bank to recognize crypto as a store of value. His appointment as deputy governor was announced last week.
His remarks coincide with those of former PBoC president Zhou Xiaochua, who seemed to draw a distinction between the “real economy” and the one in which digital currencies play a role:
“Finance is to serve the real economy. Whether it is digital currency or digital assets, it should be closely integrated with the real economy and serve the real economy.”
China’s central bank is currently piloting the digital yuan initiative, which was first proposed in 2014, and is now deploying the digital currency in major cities throughout the world. Li went on to state that the PBoC will be “focusing primarily on domestic use” of the digital yuan, but that China will consider cross-border payments and transactions “in the long term.” According to reports, the nation intends to use the digital currency at the 2022 Winter Olympics in Beijing.