China’s stance on Bitcoin remained very strict. The country’s government had imposed a ban on the use of Bitcoin and other altcoins in 2017. But the recent statement showed the positive attitude of the central bank of China. The deputy governor of the People’s Bank of China said that Bitcoin could serve as a form of investment.
Like many other governments, China’s ban on cryptocurrencies involved using, purchasing, and accepting Bitcoin as payment. The statement made by the deputy governor shows that some part of the ban has been lifted as the purchase and use of Bitcoin as an investment will no longer be illegal.
The words of the deputy governor cannot be interpreted in this light. He is reported to have categorically said that Bitcoin is not being considered as a form of payment or currency but rather an investment alternative. Hence, the use of Bitcoin or any other cryptocurrency as a form of payment by any business or individual is still illegal.
Considering the state of affairs as regards Bitcoin from 2017 to date, it can be said that this is a progressive move that will benefit Chinese crypto traders and investors.
Despite the ban and stringent rules, China is recorded to have the highest number of Bitcoin investors. The people seem to accept the changes that come with the modern finance market, but it will surely take a while for the government to accept cryptocurrencies.
The lack of a supervising body or authority for the crypto world has delayed the acceptance of cryptocurrencies by the government. The volatility and risks it poses to the country’s currency also contribute to the government’s resistance towards digital assets.
The statement by the deputy governor of the People’s Bank of China lightens the ban. Citizens of China can now have crypto coins as an investment as per the law, but nothing more.
The Chinese government is also working on its own digital currency, the digital yuan. China’s central bank digital currency will function on a centralized system, and its sole purpose is to represent the yuan in the digital space.