China’s Central Bank Believes Bitcoin will be Dead in a River

Posted in: Archive
December 5, 2017 3:12 PM UTC

A People’s Bank of China (PBoC) official has stated that he thinks bitcoin will end up floating down a river as a dead body.

Speaking at a financial forum in Shanghai, Pan Gongsheng, a deputy governor of the PBoC, spoke about the central bank’s September decision to crack down on domestic digital currency exchanges and initial coin offerings (ICOs).

According to him, it was ‘scary to think about’ where the market would be now if ICOs, bitcoin transactions, and financing activities were still taking place in China.

During his speech, Gongsheng cited a column by economist and professor at the Kedge Business School in France, Éric Pichet in the French national, La Tribune. In it Pichet argues that the cryptocurrency will come to an end from a hack into the blockchain or via a global ban from governments.

In a rough translation, he writes:

The first would be the breakout of the century (such as theft by password) or a break-in in the blockchain system that would lead to a flood of fake bitcoins, and therefore a collapse of prices.

It’s evident, however, of Gongsheng’s views regarding the digital currency. So much so, that he believes it will eventually die. Citing lines from Pichet, and making referencing to British economist John Maynard Keynes, Gongsheng said:

As Keynes has taught us, ‘the market can remain irrational longer than you can remain solvent.‘ There is only one thing left to do: sit on the bank of the river to see the body of the bitcoin pass, a future day.

Recently, it was reported that the U.K. Treasury department is planning to introduce tighter regulations on digital currencies such as bitcoin in a bid to combat crime like tax evasion and money laundering.

It appears that the U.K. government is now taking a leaf out of China in an attempt to prevent criminal activities with the use of digital currencies.

Interestingly, while Chinese authorities may have hoped for the end of the digital currency that hasn’t happened. In fact, not only has it continued, but it has flourished as well. Despite the hurdles that bitcoin has faced throughout the year, it has maintained its gain in value, further cementing itself into the mainstream.

What impact the U.K.’s steps will produce have yet to be seen, but it may just be another factor that maintains the strength of the cryptocurrency in the growing market.

Featured image from Shutterstock.

Last modified: May 20, 2020 9:17 PM UTC

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