Incoming PBoC Governor Has Spoken Positively On Bitcoin

March 20, 2018

The People’s Bank of China has a new governor, Yi Gang. In the past, Yi has used positive terms to describe bitcoin.

  • China’s National People’s Congress voted to approve President Xi Jinping’s nominee for central bank governor on March 19. Yi Gang, who had previously served as deputy governor at the People’s Bank of China (PBoC), was reportedly appointed to his new post on the same day.

    With Liu He, the president’s leading economic advisor, also ascending to the position of vice premier that Monday, some are speculating that Yi will play a supporting role to Liu in drafting the country’s economic policy.

    After being appointed, Yi said that the “main task is that we should implement prudent monetary policy, push forward the reform and opening-up of the financial sector, and maintain the stability of the entire financial sector.”* As governor, he is expected to continue pursuing the liberalizing agenda of Zhou Xiaochuan, his predecessor in the role.

    Last week, while still governor, Zhou speculated that digital currency could someday replace paper money in China’s economy. That same day, it emerged that the PBoC is in the process of developing such a currency.

    As the central bank’s deputy governor in November 2013, Yi described bitcoin as “inspiring” while addressing a forum. On the same occasion, he noted that the bank did not presently recognize the digital asset’s legitimacy, but seemed to leave open the possibility that the PBoC’s perspective on the matter could evolve.

    In January 2018, it was reported that PBoC vice governor Pan Gongsheng called for a ban on the provision of services that support cryptocurrency trading. Around the same time, the bank apparently partnered with several government agencies to jointly crack down on cybercrime, a category that ostensibly includes virtual currency-related fraud. 

    On the 19th of that month, a letter appearing to originate from the PBoC called on Chinese banks to refuse to process transactions related to cryptocurrency. 

    In May 2017, the central bank announced that it had established a FinTech committee to study the “impact of financial and technological development on monetary policy, financial market, financial stability and payment and settlement.”

    [Translations by Google, except where denoted with an *, where the quote was translated by Bloomberg.]

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