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China Still Tough On Cryptocurrencies, But Positive On Blockchain


The apex bank in China continues to have its tough stance on dealing with cryptocurrencies in China. People's Bank of China (PBoC) Governor Zhou Xiaochuan said the cryptocurrency market has become highly speculative and misleading for investors, according to reports.

The central bank is "carefully watching bitcoin like financial products and strengthening consumer and investor protection and education."

China is strictly against recognizing cryptocurrencies as legal tender. However, Zhou said "China recognizes that digital currency is inevitable and is likely to eventually replace paper money and coins. It is in no hurry to regulate cryptocurrencies."

He warned against introducing highly speculative products such as bitcoin that are highly volatile, which will end up impacting the country's monetary policy and financial stability.

Meanwhile, the central bank continues to be positive on blockchain technology that is underlying bitcoin and other cryptos.

"For blockchain projects with technological potentials, they should conduct thorough testing before rolling out services. Otherwise, a reckless expansion may incur serious security and financial stability issues," Zhou said.

In September last year, PBoC had banned betting on bitcoin and other cryptocurrencies. As part of stepping up the crackdown on cryptocurrency exchanges, Chinese authorities blocked online platforms and mobile apps that offer exchange-like services in mid-January.

Regulators around the world are closely watching cryptocurrencies amid concerns over excessive speculation, money laundering and tax evasion, which led to increased volatility in global markets for bitcoin and other digital tokens since November.

As of 9.00 am ET on Monday, Bitcoin was up 6.56 percent at $9,790.00 on Coinbase.

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