The Chinese regulators claim that BTC is only an alternative investment and they are only considered crypto assets until a proper legal classification is created so let’s read more in our latest Bitcoin news today.
Li Bo, the deputy governor of the People’s Bank of China said that Bitcoin and other stablecoins are the only alternative investments in the eyes of the laws. He said during an Asia Forum:
“We regard bitcoin and stablecoins as crypto assets. Crypto assets, as Agustin just discussed, are investment alternatives, they are not a currency per se. The main goal we see for crypto assets, going forward, they are mainly investment alternatives.”
The stablecoins are cryptocurrencies pegged to the fiat currency like the US dollar or the British pound which are redeemable for each other and match the supply that is equal to the underlying assets. They are a huge market as well. The stablecoins like Tether and USDC represent over $48 billion and $12.5 billion worth of USD but still remain in a regulatory grey area in most countries.
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The authorities are taking notice and are making relevant policies for their well functioning in the broader ecosystem.
Breaking: Li Bo, deputy governor of the Central Bank of China, said that crypto assets such as Bitcoin should be used as investment tools or alternative investments. This is the first time that the Chinese government has recognized the asset value of cryptocurrencies. pic.twitter.com/bgDIVA1eMJ
— Wu Blockchain (@WuBlockchain) April 18, 2021
Bo noted that if stablecoins ever gain widespread popularity in China, their issuers will be legally regulated as the traditional banks:
“For stablecoins, they are crypto assets, and if they want to be accepted widely as a payment solution, we need stronger regulations, stronger than bitcoin maybe, in the sense, something like a currency board. Going forward, I think stablecoins, which may have the vision to become a widely accepted payment solution, has to be regulated like a bank or a quasi-bank.”
Tether has just surpassed $45B market cap! 🎉
And it was only in January when Tether tokens ($USDt) stood at US$25 billion. Another milestone has been reached! 👩🏽🚀🚀
Stay up to date on our official Telegram channel ⬇️https://t.co/137b5oOauU pic.twitter.com/oNv7APaz9g
— Tether (@tether) April 13, 2021
China enjoyed a love-hate relationship with crypto so far but the government is still quite strict about their usage and possession with the local market remaining one of the biggest crypto trading zones in the world. It also hosts over 80% of the world’s BTC miners. The Chinese regulators claim that they haven’t banned the ownership of cryptocurrencies yet but certain court cases in China consider the assets as legal property in order to settle matters in previous instances. The legal issues are still going on in the country for now as Bo noted while speaking about the PBOC stance on regulation of the crypto market:
“As for investment alternatives, many countries, including China still, [are] looking into it and thinking about what kind of regulatory requirements – maybe minimal but we need to have some kind of regulatory requirement – to prevent the speculative nature of such assets [from creating] any serious financial stability risk.”
In the meantime, the PBoC governor said that China is on track when it comes to the digital yuan and the upcoming CBDC is slated for a mid-2022 launch.
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