Some reports prompt that Chinese government is about to reconsider its controversial bans on cryptocurrency trading to support the market regulation.
The lead story on Globaltimes.cn, which appeared on May 30, 2018, on the news website owned by People’s Daily – China’s official communist party newspaper, may indicate that Chineses authorities may be up to review its cryptocurrency regulations.
Earlier this year, People’s Bank of China enforced a ban on the country’s and overseas cryptocurrency exchanges and ICO websites. Since then there were controversial concerns about the future of cryptos in China. Controversy has become more fueled by the statement of Zhou Xiaochuan, the Chinese central bank governor, in March 2018, which prompted that the government might see digital assets as an imminent step in the evolution of money.
The governor claimed that the replacement of paper money and coins by digital assets was inevitable, further revealing that the PBOC was studying Bitcoin and other cryptocurrencies with the aim to launching its own digital currency. But at the same time, in that same month, some reports appeared pointing that the country’s bans on crypto trading went as far as blocking social media accounts linked to exchange platforms.
However, the editorial of the party’s newspaper firmly indicates that China may slightly release its pressure on cryptos and initiate its own regulations on the market. Also, it should be noted that lead article in People’s Daily newspaper does not reflect the opinion of the individual journalist, but traditionally is an authoritative statement by the Chinese government, which purpose is to give information to the public or to see how people would react to it.
The recurring idea of the issued editorial says that a complete crackdown on a technology cannot be effective and may lead to unexpected consequence of letting another country to reach the technological leadership over China, whose economy has always been driven by innovations. The following words aptly represent the idea of the article:
“…Fencing off bitcoin exchanges can’t effectively end bitcoin trade, and fears of a bitcoin bubble could leave China behind in the digital currency revolution.”
But this doesn’t mean that the restrictions will at once become softer. Probably, China may keep some of limitations on cryptos due to their vigorous and uncontrolled tendencies on the market right now as they may potentially threaten China’s financial system stability. In the editorial, government calls to take a time to adopt crypto.
Among or else, the editorial also suggests another resolution of the problem. For example, the country proposes a strategy to wait for the US government’s regulations on Bitcoin, which may work better than introduction of sharp limitations on cryptos.
In the conclusion, the paper raises the continuous question of economic supremacy, marking its main competitor:
“[The] more proactive stance the US takes in regulating the cryptocurrency market…over time will contribute to digital currency sophistication in the world’s largest economy. It’s time for China to lay the regulatory groundwork for its rise as a future digital currency trendsetter.”