“These are the alternative investment,” Li Bo told the Boao Forum. “We regard Bitcoin Und Stablecoin als Kryptoassets.
Li Bo, the Deputy Governor of the Chinese People’s Bank (PBOC), said during his speech at the Boao Forum for Asia on 18 April that the pilot program for digital yuan is aligned with six additional regions this year, plus the request for winter Olympics.
The financial hub of Shanghai, Hainan province, the central cities of Changsha and Xi’an, The port cities of Qingdao in the province of Shandong and Dalian in the province of Liaoning were selected from this week onwards to participate in the programme.
“”We’re also prepared to launch digital yuan during the forthcoming Beijing Winter Olympics for domestic users, international sporting professionals and visitors.” said Li Bo.
China is starting a digital currency early in the race. Last year in cities like Beijing Shenzhen, Shenzhen, Suzhou, Xiong’an and Chendu, despite the pandemic, the country took the lead by rolling out the digital yuan test.
China Construction Bank was China’s first state-owned commercial bank to test digital yuan e-wallet. On 29 August 2020, the bank quickly shut down the feature in its app. it launched the feature.
The first batch of airlines this year to cooperate with commercial Chinese banks to accept digital yuan in payments of tickets. The order for a digital yuan flight flight ticket from Shanghai to Shenzhen recently was placed with Spring Airlines at 560 yuan.
Li Bo says China’s central bank focuses rather than replacing US-dollar domination as the world’s reserve-current currency on how the digital yuan will work in domestic economics.
“We’re saying many times that it is a natural process for renminbi internationalization and we’re not aimed at substituting the US dollar or any other international currency,” he added.
Zhou Xiaochuan, the former PBOC governor, echoed Li’s statement at the same panel, saying: “the largest demand of digital yuan is in domestic retail; financial retail system is the foundation of all. After building the foundation, we can gradually and properly promote the use of digital yuan in cross border payment.”
Although important steps are being taken to take the lead in launching a national digital currency, Li Bo says there is still no clear timeline for the digital yuan to be implemented nationwide.
Interestingly, despite the country’s cautious view of cryptocurrency, China also planned to adopt anonymous Blockchain technology in digital yuan.
Mu Changchun, head of the PBOC Digital Currency Research Institute, spoke at the March Economic Forum organized by the state, saying that digital yuan would enable anonymous small-scale transactions, which are committee-specific data protection.
With a total market value of more than $2 trillion for cryptocurrencies, global monetary authorities have increased their alertness. Turkish and Indian governments are clamping down on bitcoin-led cryptocurrencies, while China is known to call bitcoin a “investment alternative” for its sound financial control.
Li’s most recent comments point to the central bank’s possible shift in tone. Although China has always held a negative perspective on cryptocurrencies, it has always been a center for bitcoin mining activities.
In 2013, PBOC published a statement with other regulators citing money laundering concerns and a threat to financial stability, saying that financial institutions and payment companies are prevented from using Bitcoin as an investment target for trusts, funds, etc., and issuing Bitcoin-related financial products.
In 2017, it shut off local cryptocurrency exchanges and prohibited initial coin offers (ICOs) to collect money from crypto companies through the issuance of digital tokens.
It also points to “The first recognition of the asset value of cryptocurrencies by the Chinese Government,” influential blockchain Colin Wu commented on Twitter.
When Vijay Ayyar, Head of Business Development for the Luno Crypto-monetary Exchange, spoke of the drive behind the shift in tone of the PBOC, he said that the government realizes it’s a sustainable but still growing asset class and that it needs to be regulated. “China’s crypto-regulation would give China and the industry in the country and globally another massive boost,” he added.
Cryptocurrencies’ explosive growth has boosted potential market demand. Consequently, certain securities regulators adapt their policies.
In February, Canada approved its first Bitcoin ETF and in April three Ethereum ETFs. The USA reportedly has submitted Bitcoin ETF applications for the Securities and Exchange Commission with Greyscale, VanEck, Fidelity and Valkyrie Digital Assets. Huobi, a cryptocurrency exchange which mainly serves Chinese users, was granted the license to issue a pure crypto-asset fund by the Hong Kong Securities and Futures Commission in March.
“Like many other states, China is also exploring how to regulate investment in cryptocurrencies and avoid serious risks to financial stability,” Li said, “they aren’t a currency per se…and the central bank will keep its existing cryptocurrency regulation.”