Date
17 October 2018
People's Bank of China governor Zhou Xiaochuan said China does not "currently recognize bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments". Photo: Bloomberg
People's Bank of China governor Zhou Xiaochuan said China does not "currently recognize bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments". Photo: Bloomberg

PBOC governor says bitcoin not a legitimate method of payment

China does not recognize bitcoin and other digital currencies as legitimate forms of payment, the central bank governor said.

“We do not currently recognize bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments,” Reuters quoted People’s Bank of China governor Zhou Xiaochuan as telling reporters on the sidelines of the annual session of the National People’s Congress, the country’s parliament. 

“The banking system does not accept it.”

China has taken a string of steps in recent months to clamp down on the cryptocurrency market, including closing exchanges and banning so-called initial coin offerings (ICOs) – digital, token-based fundraising rounds.

Zhou’s remarks added to pressure on bitcoin after the United States on Thursday said “potentially unlawful” online trading platforms for cryptocurrencies may be giving investors an unearned sense of safety and should be registered with the regulator.

Bitcoin dropped below US$9,000 on Friday to its lowest level in 3-1/2 weeks on concerns about regulatory clampdown around the world.

Zhou said China paid close attention to the blockchain and distributed ledger technologies that bitcoin is built on, but that some applications of the technology had grown too quickly.

“If they spread too rapidly, it may have a big negative impact on consumers. It could also have some unpredictable effects on financial stability and monetary policy transmission,” he said.

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