Recent changes within the People’s Bank of China (PBOC) have put an end to speculations about the nation possibly relaxing its restrictions on digital-asset trading. Many in the industry believed that China might consider easing its anti-crypto policies, especially after showing support for Hong Kong’s ambition to become a crypto hub. However, with the appointment of a new top official at PBOC, it seems that the focus remains on maintaining policy continuity, rather than making any significant changes.
Pan Gongsheng’s Appointment To PBOC
Industry executives, like Circle Internet Financial Ltd. CEO Jeremy Allaire, saw potential in Beijing’s support for Hong Kong’s ambitions to become a crypto hub, leading them to believe that China might reconsider its anti-crypto policies. However, the appointment of Pan Gongsheng as the top Communist Party official at the People’s Bank of China served as a reminder that policy continuity is likely to be maintained.
Pan’s appointment suggests he might be in the running for PBOC governor, and it is a signal that the institution intends to uphold its 2021 declaration of all crypto-related transactions as illegal. Moreover, some of Pan’s past comments during an earlier crypto clampdown have drawn attention for their colorful and unusual nature coming from a Chinese bureaucrat.
“If you sit by the river and watch, one day the corpse of Bitcoin will float in front of you,” he said at an event in 2017
China’s Unyielding Stance Against Crypto
The People’s Bank of China (PBOC) has not disclosed Pan Gongsheng’s current stance on cryptocurrencies or whether China’s ban on digital assets will change. Experts, including Bloomberg economist David Qu, believe that Pan’s appointment reinforces the PBOC’s strong opposition to Bitcoin. PBOC governors have historically not supported Bitcoin, and the developments in Hong Kong are seen as irrelevant in mainland China’s perspective, as it considers it an overseas market.
Furthermore, senior officials outside the central bank are also doubtful about Bitcoin, as the government’s focus remains on the development of the digital yuan.
China’s Crypto Ban and Skepticism of Immediate Changes
Despite emerging crypto narratives suggesting a possible easing of China’s ban due to Hong Kong’s pro-crypto pivot, industry figures like Justin Sun and Changpeng Zhao have faced challenges in the United States. While there is a global shift towards more crypto-friendly jurisdictions, experts caution against expecting an immediate relaxation of the ban in mainland China.
The Chinese government’s concerns over money laundering, environmental impact, and capital outflows were the driving forces behind the clampdown on cryptocurrencies.
However in May, Changpeng Zhao mentioned a positive development.
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