The Chinese government has maintained a tight grip on the cryptocurrency sphere in the country. The launch of the digital yuan is also expected to further discourage the crypto market in the country. The high risk of the cryptocurrency market had led the government to impose bans on initial coin offerings and cryptocurrency exchanges. However, the country may be re-evaluating its stance on cryptocurrencies.
The high risk of the cryptocurrency market also translates into high rewards. Moreover, the largely untapped potential of the blockchain technology is something to be explored. This may have resulted in the Chinese government re-thinking about their harsh stance on cryptocurrencies.
The deputy governor of the People’s Bank of China, Li Bo, recently spoke on the potential of cryptocurrencies as an investment tool. The governor further stated that Bitcoin and stablecoins are encrypted assets and; hence, alternative investments. Li disregarded the role of cryptocurrencies as currencies but rather focused on the future potential as investment tools or alternative investment.
Li has been a strong advocate of cryptocurrencies and their incorporation into the economy. However, Li also stressed on the unclear and ambiguous regulation in the market. According to Li, if cryptocurrencies are to be established as payment tools then strict regulation and supervision is required.