Chinese Central Bank Official: We Don’t Want to Suppress Bitcoin

Jon Southurst
Jan 16, 2014 at 08:22 UTC
Updated Jan 16, 2014 at 21:37 UTC

A representative from the People’s Bank of China claimed in a press conference yesterday his institution is not trying to prevent bitcoin use, just clarify its status, according to a report from BitcoinExaminer.

Questioned about the central bank’s recent actions limiting bitcoin use in China, its chief of the survey and statistics department Sheng Song Cheng answered:

“We don’t want to suppress or discriminate against bitcoin, we are simply saying it is not a currency.”

Sheng stressed that bitcoin’s status in China was that of a “virtual good”, and that the bank’s position was in line with other countries’ stances.

Recent moves

The claim might seem unusual on the surface, given that the Chinese authorities have forbidden both financial institutions and third-party payment processors from accessing bitcoin exchanges in recent months. Such moves seem clearly aimed at removing bitcoin from mainstream use and keeping it available only to determined enthusiasts.

Sheng is also not known to be a digital currency fan. He was quoted in an English translation of a previous Chinese media report as saying: “Bitcoin is merely a utopia for technology supremacists and absolute liberalists.”

The ever-optimistic bitcoin community appears to be taking the news as a positive sign, though, if posts on Reddit are a guide. China has not gone any further than stopping the institutions it mentioned specifically, allowing bitcoin exchanges to continue their business and even find alternate methods for their customers to move their official national currency in and out of the system.

Preventing financial institutions from becoming involved in bitcoin exchange could be a genuinely prudent measure if the People’s Bank thought price volatility presented a risk to the country’s financial stability.

Or is the central bank simply trying to maintain an illusion of choice while guiding investors’ actions? Blocking third-party payment processors from exchanges as well as banks could be a sign.

International stance

Even other government-related agencies around the world, while seeming to remain open to greater bitcoin acceptance, choose to highlight its negative points in public statements as much as possible. A series of central bank statements around the end of 2013 and first week of this year made very similar warnings about lack of currency status, investment risk, and money laundering.

Recent updates from China have not caused much movement in the bitcoin price there. As of the time of writing, 1 BTC was trading for 5,147.49 CNY ($850.35) on BTC China and 5,137.4 CNY ($848.68) on Huobi.com.

Forbidden City image via Shutterstock

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