Director of PBOC’s Blockchain Research Institute: China Is Not Looking To Relax Cryptocurrency Regulation
Zhang Yi-feng, director of Zhongchao Blockchain Technology Institute, said in an interview with 8btc that national digital currencies will surely be issued by some central banks, but their development is not necessarily using blockchain technology.
Zhongchao Blockchain Technology Institute is set up by China Banknote Printing and Minting Corporation (CBPM), run by China’s central bank, the People’s Bank of China(PBOC), in Hangzhou last September. The institute is one of the very few institutions within China’s central bank system to conduct research on blockchain and digital currency technology and their applications.
Zhang mentioned that the advent of a central bank-issued digital currency is an inevitable trend as the economy continues to move forward, because in a fully-digitalized Internet world, digital currency is a kind of much-needed infrastructure, and is a compelling need for digital world’s growth.
Plus, the past three decades have seen a significant progress in network technology and cryptography which provide a solid technology foundation for new forms of currency .
“ Only the national digital currency which is supported by the sovereignty of the country, is more in line with the trend of monetary evolution and can meet the actual needs of the financial industry.”
As for whether the national digital currency will adopt blockchain technology, Zhang emphasized that we need to verify the concept first, and it is too early to judge that the technology is feasible or not.And a number of central banks and governments around the world are considering to issue their own digital currencies, but most are still cautiously assessing the impact and potential of the state-backed cryptocurrency.
When it comes to bitcoin and other ICO tokens, Zhang said that the cryptocurrency represented by bitcoin is a technical exploration in human history, as well as a social practice, which is of great significance to re-recognize and analyze the logic behind currency.
“However, the social practice still has not proved the feasibility of bicoin to serve as the digital currency for our society. Now we call bitcoin an asset.”
The other type of cryptocurrency is ICO tokens. Objectively speaking, the ICO model offers an innovative way seeking to solve incentive problems. Unfortunately, some ICO projects are discovered to be little more than a Ponzi scheme in practice.
As ICO market is still the freaking Wild West, Chinese authorities are not looking to relax regulation. Globally, regulators have been gaining a better understanding of ICO. At present, due to lax oversight of ICO market, it is difficult to distinguish real innovation from fake, stifling the real innovations to some extent. But when governments gradually standardize the regulatory supervision, regulation will not be in conflict with fintech innovation.
Finally, Zhang gave advice for cryptocurrency investors and blockchain entrepreneurs. “In the current market environment, investors need to have enough ‘patience’ because blockchain industry is still in its early stage.If they long for getting rich quickly, they will easily go astray. Meanwhile, entrepreneurs need to develop ‘confidence’, because the industry has a promising future, though the journey may be full of twists and turns.”