The People’s Bank of China (PBoC) chief and other top PBoC officials held a press conference in Beijing Friday discussing the yuan, capital control, fintech and market regulations. In a report from the South China Morning Post, Zhou Xiaochuan, PBoC governor, said the yuan had…
The People’s Bank of China (PBoC) chief and other top PBoC officials held a press conference in Beijing Friday discussing the yuan, capital control, fintech and market regulations.
In a report from the South China Morning Post, Zhou Xiaochuan, PBoC governor, said the yuan had no basis for sustained depreciation. He said a ‘healthy economic growth’ and a ‘stable financial market’ as reasons for this.
Last November, the yuan dropped to an eight-year low, which is believed to have been due to the unexpected U.S. presidential victory of Donald Trump. As a result, bitcoin’s popularity in the country increased with its value rising at the time, around $740.
As the Chinese economy stabilises and becomes healthier, and the nation makes achievements in supply-side reforms and global investors become more confident in China’s economy, the yuan’s exchange rate will naturally be on a trend to stabilise.
According to Xiaochuan, the central bank is interested in exploring new technologies such as digital currency.
Additionally, the PBoC encouraged the creation of fintech and to boost its development it was ready to work with industry players.
New technologies, such as digital currency and blockchain technology, will generate far-reaching impacts that may not be foreseen or predicted currently.
Fintech venture capital funding in China in 2016 amounted to $10 billion and is expected to surpass that figure this year. While giants such as Alibaba Group Holding Ltd. raised $4.5 billion have attracted a large part of the market.
Yet, while the PBoC have stated that they are open to new technologies, their recent investigation into Chinese bitcoin exchanges produced a stir within the industry. However, it is believed that this is aimed at countering money laundering and illegal outflows of capital.
China’s ‘big three’ bitcoin exchanges: OkCoin and Huobi paused bitcoin withdrawals with BTCC following after facing regulatory pressure from the PBoC last month. In a recent update, all three have confirmed that they will only resume services once approved by regulators.
The announcement appears to have done little to affect the price of bitcoin; however, it puts increasing pressure on the exchanges as they wait for regulators to approve them.
Despite the yuan and a strict stance against bitcoin exchanges, though, China remains a prosperous country for fintech companies to thrive. If anything can be taken from 2016, 2017 is set to be a year that produces positive results for the country again.
Featured image from YouTube.
Last modified: May 21, 2020 10:01 AM UTC