The People’s Bank of China (PBoC) has yet again reiterated that it is not impressed with cryptocurrencies, highlighting its belief that fiat currencies are more superior than virtual currencies in a research paper that was published earlier this month.
The paper, titled “What can a blockchain do and not do?” was written by Xu Zhong, the director of the central bank’s research unit. In the report, the author shoots down the idea that cryptocurrencies have the power to disrupt the traditional monetary system.
In fact, according to Cryptovest, a cryptocurrency news site, the research paper goes as far to say that blockchain technology will have little to no impact on the traditional financial system, virtual currencies have no intrinsic value and distributed ledger technology (DLT) is a “utopian fantasy.”
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The remarks are not out of character for the central bank of China, which again warns of “obvious bubbles” in blockchain-related investments such as cryptocurrencies, especially in Initial Coin Offering (ICO) investments.
In fact, it’s quite rare to hear good news coming out of China regarding cryptocurrencies in recent times. Not too long ago, China dominated the cryptocurrency trading and mining industries, with 95 percent of all BTC trading taking place in the country.
However, towards the end of 2017, the Chinese government set in motion a number of bans, causing a lot of confusion for cryptocurrency exchanges, miners and traders alike. First, the government banned ICOs, following this up by banning domestic crypto exchanges.
PBoC: Cryptocurrencies Bad, Blockchain – Maybe Not so Much
However, while the central bank of China is down on cryptocurrencies, the PBoC does seem to have a soft spot for blockchain technology. The paper stated that China is still overall welcoming of the industry and recommended a more practical approach to DLT. The report also believes that higher government oversight is needed.