in

Bitcoin is an Investment Says PBOC’s Deputy – Trustnodes

Bitcoin is an Investment Says PBOC’s Deputy – Trustnodes


Li Bo, the Deputy Governor of the People’s Bank of China (PBoC), has stated that bitcoin is an investment in what some are calling a reversal of China’s harsh stance towards cryptos. Bo said, according to a rough translation:

“We believe that Bitcoin and stablecoins are crypto assets. Crypto assets are an investment option, not currency itself. It is an alternative investment.

So we believe that crypto assets should play a major role in the future, as an investment tool or alternative investment. If it is used as an investment tool, many countries, including China, are studying what kind of regulatory environment should there be for such an investment method.

It is necessary to ensure that speculation in such assets will not cause serious financial risks. In other words, before we figure out what regulatory rules are needed, we will continue to maintain the current measures and practices.”

China has banned companies from accepting bitcoin payments all the way back in 2014. In 2017 they then closed major China based crypto exchanges following a diktat from PBOC prohibiting banks from serving them.

They have not however passed any law to criminalize cryptos, with bitcoin trading continuing in China Over the Counter (OTC).

On occasions banks have implemented crackdowns on OTC bitcoin trading, closing numerous accounts, yet it continues to flourish in the country.

Now four years on, some say it is only a matter of time until China opens up the exchanges once again so that it can regulate and properly tax bitcoin transaction.

Where Shanghai financial institutions are concerned, it is believed they utilize bitcoin in a sophisticated manner as a hedge and as part of their trading tools.

It is also thought since at least 2018 that China based companies on occasion go as far as to offer a discount for bitcoin international shipping payments as it saves costs and time over fiat payments.

Yet what was probably a power struggle between the banks and the central government in 2017, seemingly led to the banks winning in imposing a surprise and in some ways shocking closure of crypto exchanges.

That came at a significant cost as Coinbase IPO-ed at a valuation of $100 billion, with many of the then China based exchanges being at the time as big or bigger than Coinbase.

The decision to close exchanges therefore must have cost the Chinese economy at least hundreds of billions, in addition to a heavy political price because that move made it clear to the western business and tech world that China is not quite a stable country, but a dicy business environment.

In some ways it was a breach of an implicit contractual arrangement whereby the west was happy to build in China, and in turn the Chinese government respects basic things like property rights.

Their unilateral renegation, some suspect due to the Kremlin svengali Alexander Dugin poisoning the mind of Chinese leaders with his discredited geopolitics theory that preaches a master and slave relationship, led to a cooling of relations that now has reached the point of navy games in the China Sea.

An opening of exchanges therefore would be in effect a detente, and following the Chinese navy recent withdrawal, this softening by Li Bo has plenty wondering whether we might see a return to a cooperative China. One based on mutual benefit under some fundamental understandings and rights, and not a master-slave relationship.

That would also go towards rejecting Dugin’s theory, in favor of what has been learned the last century, including by Germany which Dugin likes to bash.

That is, our experience as a species has grown to the point on an a priori level there is a fundamental rejection of annexation or occupation or military adventures, and the experience of the United States’ breach of that in 2003, only goes to prove it further.

You can not win by gun in this new era. The species itself responds because metaphorically speaking its DNA has been changed due to past experience that brings that experience to the level of an a prior, an ‘it is known.’

You can however ‘win’ economically, but economics is based on a contractual understanding of mutual benefit. That means an apolitical business environment ruled by contractual business rights enforced by an independent judiciary.

What China was trying instead, especially as shown by the Jack Ma debacle, is the old capricious rule of the king, not the rule of law, and we all know how that ended.

Why would it be any different this time? Under what basis would any people accept capriciousness instead of rule of law, and if they are forced to accept it, why would there be economic prosperity when the economy is no longer a mutual beneficial matter but in effect the castle of the capricious king who, so being imperfect, necessarily becomes absolutely corrupt and abusive and a thief because why not? What is there to constrain?

One can hope therefore that at some point China moves on from reading 19th century theory, and opens its ears at least a bit to more modern theory, that not only has been the cause of their prosperity, but also of peace.

The alternative is a request for the enlightened west to accept kingships once again, which as the closure of the exchanges shows appears to be a requirement to build there. Something that can only mean China gradually disintegrates from the international economy.

There has to be some basic understanding therefore, and that begins with the opening of these exchanges, but whether they will, remains to be seen.



Source link

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

Loading…

0

What do you think?

Whales Move Over $4 Billion in BTC During Sunday

Whales Move Over $4 Billion in BTC During Sunday’s Market Carnage, 150 Bitcoin from 2010 Spent – Bitcoin News

Papel, the deflationary token inspired by Casa de Papel

Papel, the deflationary token inspired by Casa de Papel