- Pan Gongsheng’s elevation hints at continued Chinese crypto prohibition.
- China views Hong Kong’s crypto moves as irrelevant.
- The government’s focus remains on the digital yuan, not Bitcoin.
In an unforeseen turn of events, speculation surrounding a shift in China’s stance on digital-asset trading suffered a blow. Consequently, top industry figures, including Jeremy Allaire, Circle Internet Financial Ltd.’s CEO, had to rethink their optimistic views.
Based on sources, Allaire, among others, had interpreted Beijing’s silent endorsement of Hong Kong’s evolution into a crypto nucleus as a hint of a possible policy shift. However, a recent shakeup within China’s central bank has cast a chill over such conjectures.
Significantly, China’s People’s Bank (PBOC) saw the elevation of Pan Gongsheng to its top Communist Party official. As per a Bloomberg report, this move could put Pan in the race for the position of PBOC’s governor.
Many see this development as a sign of policy persistence, notably the 2021 ruling declaring all crypto-related transactions unlawful. Additionally, Pan’s previously vocal criticism of Bitcoin adds color to this bureaucratic appointment.
Back in 2017, Pan echoed the thoughts of Kedge Business School’s professor Eric Pichet when he stated:
If you sit by the river and watch, one day the corpse of Bitcoin will float in front of you.
Furthermore, he expressed apprehension regarding the potential repercussions had China not curtailed digital assets. Meanwhile, requests for comments on Pan’s outlook on crypto and China’s digital asset prohibition have not received any response from the PBOC.
On the other hand, David Qu, a China economist at Bloomberg Economics and an eight-year central bank veteran, offered some insights. “Based on my knowledge, no PBOC governor would support Bitcoin,” Qu said. Moreover, he pointed out that mainland China typically perceives Hong Kong as an overseas market, rendering its developments inconsequential.
Senior officials outside the central bank have also criticized Bitcoin. Instead, the government’s focus lies on the development of the digital yuan, added Qu. Hence, despite Hong Kong’s rise as a crypto hub, mainland China remains steadfast in its resistance to digital assets.