China is a country well-known for its support toward the ‘blockchain not bitcoin’ narrative. The country attempted to clamp down on cryptocurrencies more than once, but it appears that it’s now softening its stance, even taking a somewhat positive approach towards Bitcoin.
Bitcoin as an Alternative Investment Tool
Speaking at the Boao Forum for Asia on April 18th, the former central bank governor of China, Zhou Xiaochuan, and the current central bank deputy governor Li Bo opined on the matter of Bitcoin and cryptocurrencies.
"We believe that crypto assets should play a major role in the future, either as an investment tool or as an alternative investment. Many countries, including China, are also studying it as an investment tool.”
Adding to the matter, Zhou Xiaochuan said that people don’t necessarily need to know whether the technology behind digital currencies is centralized or decentralized because “ordinary people don’t necessarily understand what the system behind it is like.” He also ascertained that whatever the case may be, digital currencies must not be used for illicit activities such as money laundering, tax evasion, drug or weapon trafficking, or gambling.
Furthermore, Li Bo said that bitcoin, as well as stablecoins, are “encrypted assets” and that they are an investment option but not a currency.
"If it is used as an investment tool, many countries, including China, are also studying what kind of regulatory environment should there be for such an investment method. Although this regulatory rule is the minimum regulatory rule, there are still regultory rules.”
The high-ranked official doubled down on the importance of legislation which ensures that “speculation in such assets will not cause serious financial risks.” Ultimately, despite the hints of a more positive approach towards bitcoin and other cryptocurrencies, Bo said they would continue to maintain the current measures and practices.
Positive Market Reaction
Yesterday we saw a serious market-wide crash throughout all cryptocurrencies. As early reported, bitcoin dipped below $52,000, Ether went below $2,000, and so forth, resulting in more than $10 billion worth of liquidations across the board.
Today, however, things are looking brighter. The majority of cryptocurrencies are on the path of recovery, with BTC testing $58K already. ETH is trading at around $2,250, BNB reclaimed $500, while other large- and mid-cap altcoins also chart substantial increases.