The New Head of China’s Central Bank Might Show More Love for Crypto
A new governor was unexpectedly appointed to the People’s Bank of China (PBOC) on March 19. It is speculated that he could soften the bank’s stance on cryptocurrency, given that he has already spoken in favor of it before.
Yi Gang, whose appointment is seen as “pointing to continuity in monetary policy even as one of the world’s biggest central banks is gaining considerable new regulatory powers,” was reported by Chinese media to have spoken about cryptocurrency in 2013, saying that while the legitimacy of Bitcoin may be hard to trace, he thought it “inspiring” and likely to remain interesting in the long term.
Yi is replacing former PBOC governor Zhou Xiaochuan. On March 9th, Zhou said that the development of cryptocurrency is “technologically inevitable,” but the banking system still does not accept it as payment. According to Reuters, although bullish on blockchain, he still advised caution: “If they [Blockchain technologies] spread too rapidly, it may have a big negative impact on consumers. It could also have some unpredictable effects on financial stability and monetary policy transmission.”
According to Tommy Xie, China economist at OCBC Bank in Singapore, “In terms of implication, we see policy continuation as Yi will support Liu He [a Vice Premier of the People’s Republic of China] to drive economic reform. Both are the main driver to China’s reform in the past few years,” Reuters reported. Taking into account both Yi’s support of economic reforms and favorable stance towards crypto, the new PBOC appointment could signal the possibility of a new regulatory approach to cryptocurrencies in China.
For now, China’s official stance on crypto remains unchanged, as the ban on ICOs, crypto-fiat exchanges and lately also foreign cryptocurrency exchanges still stands.
However, it might be hard to believe, but cryptocurrencies could make its way back into the Chinese market, although most likely in a slightly different form. Officials, business leaders and influential media outlets in China have been striking a promising tone in February and March toward blockchain, as reported by Cryptonews.com.