The Governor of the People’s Bank of China (PBoC), Zhou Xiaochuan, stated in a press conference that Chinese authorities are not rushing to issue a national digital currency and do not recognize Bitcoin as a legitimate payment method, China Daily reported.
Zhou expressed PBoC’s position regarding Bitcoin and cryptocurrency:
“We do not currently recognize Bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments. The banking system does not accept it.”
The comments were made as part of a press conference at the annual National People’s Congress, where Zhou further stated the PBoC “must prevent substantial and irreparable damages” to the domestic economy. However, Zhou expressed that digital currency will ultimately diminish cash circulation. Local news media outlet China Daily quoted him declaring the development of digital currency is “technologically inevitable.”
While the Central Bank of China has been actively monitoring the development of blockchain and distributed ledger technology, Zhou added that certain applications of the technology should be controlled to ensure they do not spread too fast:
“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.”
In February 2018, fellow State-run institution Bank of China filed a patent for a blockchain system-scaling solution.
Beijing continues to take a hard stance on decentralized cryptocurrencies such as Bitcoin, with a ban on Initial Coin Offerings (ICOs) since Sept. 2017 and continuing crackdowns on the few remaining vestiges of private trading. Last month, China added offshore cryptocurrency exchanges and ICO websites to its “Great Firewall”.
China’s central bank has previously stated they were considering creating their own fiat cryptocurrency, that may not even be built with blockchain technology.
However, China has still embraced the blockchain and last year, Miaocai Network (miaocaiwang.com), a Chinese taxation system certified by the State Administration of Taxation announced the establishing of an Internet-based finance and taxation service platform and exchange. Miaocai Network partnered with the “government affairs chain GACHAIN” to launch a GACHAIN-based tax electronic invoice and social tax-collecting service, utilizing Fintech linked to China’s “National economic data security system.”
It is also worth noting that shortly after the Shanghai meeting with Russia last year, China’s Central Bank – People’s Bank of China – tested a national Chinese digital currency.
If implemented it would be introduced alongside China’s primary currency the Renminbi (Yuan). China simulated possible economic scenarios and ran mock transactions using the cryptocurrency with some of its commercial banks.
Bitcoin is currently trading at [FIAT: $9,253.49] at the time of this report according to Coin Market Cap.
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