Chinese C-Bank Asserts Fiat Superiority over Crypto

[Leonardo]

The People’s Bank of China (PBoC) remains unimpressed with cryptocurrencies, as reiterated through a recently published research paper which expresses confidence in the superiority of fiat currencies over crypto.

Authored by the Chinese central bank’s research wing, the paper, titled “What Blockchain Can and Cannot Do,” sweeps aside any merit or potential that cryptocurrencies and blockchain technology might possess to trigger financial innovation and disrupt the traditional monetary system. The regulator expresses the belief that crypto and blockchain will have little to no impact on the conventional financial system, with digital assets possessing no intrinsic value.

The paper proceeds to discuss the shortcomings of blockchain tech, claiming that distributed ledger technology (DLT) is a “utopian fantasy” that promises much but delivers little, hindered by legal and practical shortcomings, and producing no tangible social benefits.

Xu Zhong, director of the PBoC research wing and author of the report, states further that blockchain technology has been unreasonably touted as a panacea that will bring stability to the financial sphere. However, he calls into question the practicality, scalability, and actual merits of DLT and decentralization, claiming they cannot possibly replace existing systems and institutions. At best, blockchain tech can only hope to fix existing financial systems to a certain extent.

The report also urges the Chinese government to work towards fleshing out a concrete legal framework for overseeing the use of blockchain technology so as to prevent fraud, pyramid schemes, and other criminal activities that can potentially be carried out via crypto, for example, money laundering and tax evasion.

Famously anti-crypto, China imposed a blanket ban on cryptocurrency trading and initial coin offerings (ICOs) in 2017. In September this year, the PBoC issued a fresh warning to investors, urging them to keep in view the risks associated with cryptocurrency trading and ICOs.China crypto,China blockchain,People’s Bank of China blockchain

Despite its notoriously hardline official stance, China does appear to be keenly interested in blockchain tech. In addition to publishing a blockchain guide for government officials, the country pilot-tested a blockchain trade finance platform earlier this year to assist small and medium enterprises. As of 2017, the PBoC also held approximately 33 blockchain patents.

Source: https://cryptovest.com/news/chinese-c-bank-asserts-fiat-superiority-over-crypto/