China’s PBOC Appoints Bitcoin Skeptic, Crypto Ban Still Strong?

In a recent shake-up at the People’s Bank of China (PBOC), hopes of a potential relaxation of China’s ban on digital-asset trading since September 2021, were dampened. Speculation had arisen due to Beijing’s support of Hong Kong’s bid to become a crypto hub. However, the appointment of Pan Gongsheng, a prominent Communist Party official, as the top official at PBOC, indicated a commitment to policy continuity, Bloomberg reports.

China’s PBOC Shake-Up Sends Mixed Signals

Pan’s historic remarks during a previous crackdown on crypto, including a statement in 2017 about the eventual demise of Bitcoin, have resurfaced with his new appointment.

“If you sit by the river and watch, one day the corpse of Bitcoin will float in front of you,” he said at an event in 2017

However, the PBOC has not provided any comment on Pan’s current views on cryptocurrencies or the future of China’s digital-asset ban. Last year, the China Economic Daily, the voice of China’s Communist Party, hinted at stricter regulations on ‘digital collections’ or NFTs.

Experts, including Bloomberg economist David Qu, suggest that Pan’s appointment underscores the PBOC’s unwavering stance against Bitcoin. Qu highlights that PBOC governors historically have not supported Bitcoin, and the developments in Hong Kong hold little relevance as mainland China perceives it as an overseas market.

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Additionally, senior officials outside the central bank also express skepticism towards Bitcoin, with the government’s focus centered on the development of the digital yuan. Last year kicked off with a major leap forward for the e-CNY – also known as the digital yuan – as the beta version of the digital yuan app was officially launched for iOS and Android on Chinese app stores.

Crypto In China

While crypto narratives have emerged, with some projecting an easing of China’s ban based on Hong Kong’s pro-crypto pivot, industry figures like Justin Sun and Changpeng Zhao have faced challenges in the United States. They note the shift towards more crypto-friendly jurisdictions globally but caution against anticipating an immediate relaxation of the ban in mainland China.

Beijing’s concerns over money laundering, environmental impact, and capital outflows prompted the clampdown on crypto. In May, CZ shared positively that China Central Television (CCTV), the national television broadcaster, broadcasted crypto.

As of now, Bitcoin remains stable at $30,670, showing an 85% increase in 2023 while Ethereum steers towards $2000 ark. The crypto market will closely monitor any future developments in China’s regulatory stance under Pan’s leadership at the PBOC.

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