//PBoC Governor Warns Against Cryptocurrency Speculation

PBoC Governor Warns Against Cryptocurrency Speculation

The governor of the central bank China (PBoC) was critical of cryptocurrency speculation during a media appearance on today (Friday). The central bank governor, Zhou Xiaochuan said China does not recognize Bitcoin and other digital currencies as legitimate forms of payment.

Zhou told reporters on the sidelines of the annual parliament session:

“We do not currently recognize Bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments. The banking system does not accept it.”

Speaking at a press conference amid the Two Sessions, China’s annual political event, People’s Bank of China (PBoC) governor Zhou Xiaochuan took aim at cryptocurrency projects that have shifted away from their purported use cases in favor of promoting what is essentially market speculating.

Zhou said:

“Lots of cryptocurrencies have seen explosive growth which can bring significant negative impact on consumers and retail investors. We don’t like (cryptocurrency) products that make huge opportunity for speculation that gives people the illusion of getting rich overnight.”

The comment may signal an increasing level of scrutiny down the road by the PBoC over initial coin offerings and trading services that are still available for domestic investors, even after regulators issued a ban on ICOs and essentially pushed fiat-to-crypto exchanges out of the domestic market.

It also follows recent measures reportedly taken by Chinese regulators to block social media channels offered by cryptocurrency exchanges that still provide trading services in the country.

Zhou, like many other central bankers, struck a positive note regarding blockchain tech. He said China paid close attention to the blockchain and distributed ledger technologies that Bitcoin is built on, but that some applications of the technology had grown too quickly.

On Friday, Zhou called for those behind such efforts to be cautious – and not to grow too fast.

Zhou said:

“For blockchain projects with technological potentials, they should conduct thorough testing before rolling out services. Otherwise, a reckless expansion may incur serious security and financial stability issues,”