Zhou Xiaochuan, the governor of the People’s Bank Of China, has stressed a cautious approach to cryptocurrencies but also acknowledged their inevitability. He was participating in a press conference addressing various issues around financial reform on Friday.
China has taken a hard stance against digital currencies and ICOs in recent months. ICOs are banned in the country, as are cryptocurrency exchanges. In recent weeks, the Chinese government has also been cracking down on websites which have been hosting crypto-related advertising.
China Warming to Crypto Again?
It now appears that the PBOC may not be against cryptocurrencies in principle, but believes the industry is moving too quickly and involves too much speculation.
Xiaochuan admitted that digital currencies were “technologically inevitable,” and subsequently announced that China is continuing to pursue plans to issue its own digital currency, the DCEP, at some point in 2019.
However, he wouldn’t be drawn on whether the currency would be based on a blockchain or DLT, or whether it would, in fact, be a digital version of a fiat currency.
China’s approach to cryptocurrencies will be interesting to watch in the coming months. On the one hand, the censorship resistance inherent in blockchain technology is completely at odds with China’s authoritarian approach to governance. On the other hand, resistance is likely to prove futile in the long run and will lead to China being left behind.
To date, the government has not appeared phased by the possibility of being left behind, with some analysts speculating that China actually has bigger, more progressive plans than those that have so far been revealed.