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Cash Might Die but No Hurry to Develop Digital Currency: China Central Bank Chief

Last Updated March 4, 2021 5:05 PM
Samburaj Das
Last Updated March 4, 2021 5:05 PM

The governor of China’s central bank has admitted that physical cash may become obsolete one day but insists the authority isn’t rushing to release a cryptocurrency.

Speaking during China’s annual Two Sessions conference in Beijing today, People’s Bank of China (PBoC) governor Zhou Xiaochuan claimed the authority is in no hurry to develop a digital currency. The governor was answering questions during a press conference on the sidelines of China’s annual political event when he appeared to criticize decentralized cryptocurrencies like bitcoin while suggesting that a central bank-issued cryptocurrency would avoid speculation and focus on ‘serving the real economy’, the official press agency for the PBoC Xinhua reported.

He reportedly stated:

“We must prevent major mistakes that would lead to irreparable losses, so we are cautious. We don’t like creating products for speculation and making people have the illusion that they can get rich overnight.”

Zhou, who is expected to retire  this year, has presided over the central bank through an unprecedented wave of scrutiny against the domestic cryptocurrency sector. Led by the PBoC, a number of Chinese regulators and authorities phased out cryptocurrency exchanges out of the country before following it up with a blanket ban on initial coin offerings (ICOs) last year.

The official’s remarks follow rumors of Chinese regulators moving to block cryptocurrency exchanges’ social media accounts in recent days as regulators target domestic investors and cryptocurrency adopters trading on overseas platforms. In February, a report by a PBoC-run newspaper said authorities would “take regulatory measures against ICOs and virtual currency exchanges inside and outside the country” with measures including banning and blocking access to crypto exchanges on the internet.

Meanwhile, China’s central bank continues to develop its own cryptocurrency after establishing a new ‘digital currency research institute’ in mid-2017 amid increasing calls to adopt and issue a state cryptocurrency. The central bank has already completed a digital currency trial over a blockchain that included a number of major commercial banks as participants.

Still, Zhou’s remarks today are in contrast to an official release by the PBoC in January 2016 where the authority revealed it would look to issue its own digital currency “as soon as possible.”

Featured image from YouTube/CCTV+ .