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Bitcoin does not have fundamental attributes needed to be a currency, says PBoC adviser
Digital currencies such as bitcoin and ethereum are assets, but bitcoin in itself does not carry the characteristics needed to be defined as a currency that could meet new economic development requirements, an adviser to the People’s Bank of China (PBoC) said recently, Reuters reported.
In an interview with financial magazine Yicai, PBoC adviser Sheng Songcheng stated:
“Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms...But I do not deny that virtual currencies have technical value and are a type of asset.”
Bitcoin was designed with a fixed supply – the total supply cannot exceed 21 million and the last bitcoin to be mined is expected to happen in the year 2140. According to Sheng, this clause would make it difficult for bitcoin to become a medium of exchange that could meet modern economic development needs. He also said that Chinese monetary authorities should explore the possibility of issuing a central bank digital currency, which could be regulated and run properly.
Recent reports suggested that the PBoC has opened its digital currency research institute in Beijing. The research center reportedly has seven divisions with research interests including blockchain and fintech, according to CoinDesk.
Earlier this year, reports suggested that the PBoC, along with a number of commercial banks including the Industrial and Commercial Bank of China, Bank of China and the private WeBank, completed a trial of a blockchain-based digital currency.
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