At the Boao Forum for Asia on April 18, China's former central bank governor Zhou Xiaochuan and current central bank deputy governor Li Bo expressed suitable cryptocurrencies. Li Bo said that encrypted assets should play a significant 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. Zhou Xiaochuan: As long as the money taken out of the digital wallet is a digital currency, you should not be too careful to distinguish whether it is account-based or token-based. I don't particularly care about the payment and settlement system behind it because ordinary people don't necessarily understand what the system behind it is like. You don't have to say is it decentralized or centralized. Of course, you may need to know one thing, that is, you cannot use this system to launder money, evade taxes, engage in drugs, and engage in weapons transactions. You cannot do gambling in China. This is the starting point of the digital renminbi. Moderator: Thank you! I want to ask Deputy Governor Li Bo, a few years ago, the People's Bank of China took some measures for transactions like digital currencies. Do you think the People's Bank of China will continue to maintain a strong stance on transactions like cryptocurrencies in the future?? Li Bo: We believe that Bitcoin and stable coins are encrypted assets. Encrypted assets are an investment option. It is not a currency in itself but an alternative investment. Therefore, we believe that encrypted assets should play a significant role in the future, either as an investment tool or as an alternative investment. If used as an investment tool, many countries, including China, are also studying the investment method's regulatory environment. Although this regulatory rule is the minimum regulatory rule, there are still regulatory rules. Also, to ensure that such assets speculate they will not cause serious financial risks, which must be done. In other words, before we figure out what regulatory rules are needed, we will continue to maintain the current measures and practices. The second point is that some stable coins are encrypted assets. If we want such encrypted assets to become a widely used payment solution, we need a stricter regulatory rule, which is more stringent than Bitcoin's current regulation. Because for a private company issued by a private company that will be used as a payment tool, stable coins must have regulatory rules like quasi-banks or banks to supervise the functions of such stablecoins. Therefore, in the future, if any stable currency hopes to become a widely used payment tool, it must be subject to strict supervision, just like banks or quasi-bank financial institutions are subject to strict supervision. Moderator: Governor Zhou, do you have anything to add? Zhou Xiaochuan: I agree with what I said just now. Everyone has to distinguish between digital assets and digital currencies. Digital currencies have three main characteristics, which Augustine Carstens mentioned earlier. I want to add one point. In considering these issues, China has a characteristic that we attach great importance to the real economy. Finance is to serve the real economy. Whether it is a digital currency or digital assets, it should be closely integrated with the real economy and serve the real economy. Because digital currency supports many payments, it is good for the real economy, and it must not rely on less. Without these payments, the actual economy cannot turn. So everyone has to ask, what are the benefits of digital assets to the real economy? I still have questions in my mind about this so that everyone will be more cautious. We have also gone through the global financial crisis in 2008. At that time, there were several phenomena: we were separated from the real economy, and some financial products would have problems. For example, at the time, shadow banking, some of the derivatives that everyone criticized at the time, became purely speculative transactions between several financial institutions and had no connection with the real economy. As a result, these products were prone to problems. Even the prominent leaders of many big banks, such as Citigroup or Bank of America, said that I couldn't understand the transactions of the personnel in their trading rooms, so it is difficult for me to control them internally. Therefore, for such a derivative, we are not saying that it will conclude now, but you have to be careful. Also, from the perspective of policy encouragement, this is the characteristic of China; that is, it emphasizes that financial products, financial services, and new institutions should pay attention to it. You have to serve the real economy, and you have to make it clear what your benefits are to the real economy. As the regulatory compliance of cryptocurrencies led by the United States has gradually become a system and the listing of Coinbase, Hong Kong's approval of a respectful exchange and Bitcoin fund purchase of Bitcoin by Meitu, Beijing's policy environment may be optimistic. Variety. This time, the central bank's deputy governor positively acknowledged the significance of Bitcoin and other encrypted assets as investment tools. He emphasized compliance and supervision, which is of great significance. The industry looks forward to positive changes in the future. great significance. The industry looks forward to positive changes in the future
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