Former deputy governor of China’s central bank, Wu Xiaoling, said in an interview with local news media outlets that Bitcoin is perhaps the most successful use of the blockchain so far.
Despite the government’s anti-crypto attitude and unwillingness to regulate cryptocurrency, China’s central bank, and other high-ranking officials have acknowledged and made efforts to raise awareness around Bitcoin repeatedly.
Deputy Governor of the Central Bank of China Praises the Success of Bitcoin
On June 5, Wu Xiaoling became the latest leading figure in China’s financial and regulatory industry to recognize the progress made by Bitcoin so far. Referring to commercial success, the former PBoC executive said that blockchain technology has made a breakthrough with the Bitcoin network, and it will remain the most successful invention in the future.
Governments and organizations around the world must learn a lot from this technology. Bitcoin, by its free and decentralized nature, has its own fair user base. But he stressed, the Bitcoin market is still limited to the area of private currencies.
He then goes on that the rise in popularity of virtual currencies or the digitization of fiat currencies is imminent and they must be embedded in the existing financial system to make it more reliable and strong. Trade finance, investments, or cross-border transactions, when carried out on a verifiable blockchain network, are far more secure, transparent and credible.
Volatility as a Stumbling Stone
Meanwhile, talking about the shortcomings of Bitcoin and its inability to replace fiat in sovereign countries like China, employees of China’s central bank said that Bitcoin itself has no stability in terms of price and value.
Bitcoin volatility is due to the support it gets from the government. That is the main reason why the authorities at the Chinese central bank will not treat it as a potential fiat replacement.
Although virtual currencies will largely influence social behavior in the future, without a strong framework and mature prospects, they will not be able to replace fiat currencies. What we need now is better governance and financial infrastructure that supports virtual currencies such as Bitcoin.