China has always been an important player in the cryptocurrency market. Its ICO and Crypto ban in 2017 influenced negatively the markets and at the same time, it has shown that China is an important actor in the crypto environment. China has now a new head for the People’s Bank of China (PBoC) that could be game changing for cryptocurrencies and the future of Bitcoin in the Asian country.
Could China Change its Position?
The new head of the PBoC will be a pro-free market advocate known as Yi Gang, who previously served as Vice Governor of the PBoC. It seems that president Xi Jinping is trying to modify the course of the economy for the next years.
China has been very strict when regulating the crypto market. But the new designation at the PBoC could change the way in which China considers ICOs and cryptocurrencies.
In the past, Zhou Xiaochuan, now ex-governor of the PBoC, explained that China does not recognize bitcoin and cryptocurrencies. Furthermore, he explained that Bitcoin and yuan trading is not supported by the central bank.
“We don’t like speculative cryptocurrency products since it is not a good thing to give people an illusion of getting rich overnight,” he explained during a press conference.
But even when the ex-PBoC governor gave such definitions about cryptocurrencies and bitcoin, the country is working on its own digital currency. These are mixed signals for the markets. Are digital currencies and blockchain technology bad for the financial system… or it depends whether they are controlled by a central authority or not?
With Mr Yi Gang as the new governor of the PBoC, and Liu He as Vice Premier, things could change for better in China. Cryptocurrencies could be viewed as less dangerous assets and allow them to grow in the Asian country. That does not mean that regulations would just disappear from one day to the other. But it could be the beginning of a different approach towards cryptocurrencies.
Eswar Prasad, former China head for the International Monetary Fund (IMF) commented:
“Liu and Yi have a shared understanding of the need for financial market reforms and liberalization, coupled with more effective regulations.”