April 11, China central bank governor Yi Gang attended a SubForum on monetary policy at the Boao Forum for Asia Annual Conference 2018 in Hainan. The new governor of People’s Bank of China (PBoC) has sent a clear signal that, the government monetary authorities would launch a series of strict regulatory measures on virtual currency. Yi Gang also stated China is serious about its commitment to opening up its economy and reforming its financial markets. 

Yi was questioned over whether any new measure would come up to strength regulatory on virtual currency in 2018, as well as PBoC’s attitude on blockchain.

In response to the enquiry, Yi said, in his personal view, the virtual currency has a little contribution in serving the real economy, there are some speculative activities and even some money-laundering behavior manipulating the virtual asset market. Therefore, PBoC has treated virtual currency with more caution.

Nonetheless, China is positive towards blockchain technology. China has the largest number of blockchain patents in the world and is playing a leading role in the research field of digital currency worldwidely. China is pursuing the research and develop of digital currency, blockchain technology and Fintech to explore a better way to benefit the real economy. On the other hand, avoiding potential negative influences from these emerging technology is also the duty of PBoC and other monetary authorities.

“In general, PBoC is maintaining tight supervision among virtual currency, in the main time, the central bank is also exploring a better way for digital currency to play a more active role in service to the real economy.”

China would also further open up its financial market to the world, most measures will be in place by June 30. When questioned about whether the central bank would use the monetary policy as a weapon to fight back in the trade war between the U.S. and China, Yi answered that China will not resort to yuan devaluation to counter trade tensions. He also added that the China-US interest rate differential is still in a comfortable range.