As digital currencies such as bitcoin continue to grow and capture markets, the debate about their status (legal/illegal, commodity/currency etc.) has come to the forefront.

In recent statements made during the inaugural Big Data Financial Forum, Sheng Songcheng, the director of the survey and statistics department of the People's Bank of China (PBOC), has said that only digital currencies issued by the central bank have national credit support to become the true sense of currency, according to loosely translated version of article on ce.cn.

He said that as long as fundamental changes do not occur to the social organization of the country, the national credit-based monetary system will always exist, adding that bitcoin cannot become a country's currency. Songcheng said that bitcoin is essentially just a use of techniques, and at best, is an asset, rather than a real currency.

According to the news source, Songcheng voiced his opinion about bitcoin two years ago as well. He emphasized that bitcoin is fundamentally not currency and cannot replace currency. It is, in fact, the use of string of codes generated by complex algorithms and is different from gold. However, he said that that the digital currency can have value and can become a medium of exchange, which depends entirely on the trust of people. 

Songcheng expects to see central bank digital currencies based on blockchain technology in the future, which will help build China’s financial infrastructure by improving the efficiency of the country’s payment and settlement system. In addition, the central bank digital currency will eventually form an open and transparent system, thereby improving convenience and transparency of economic transactions, reduce money laundering, tax evasion and other illegal and criminal activities.

The new source further noted that Songcheng does not believe that digital currencies will replace the currency and monetary policies. According to him, monetary policy is one of the most important means of regulating the economy, and that the important role of central bank currency and monetary policy is irreplaceable in the modern economy.

The statements come at a time when the People’s bank of China has revealed its plans to launch its own digital currency. In February, PBoC Governor Zhou Xiaochuan suggested that the central bank is not only interested in digital currencies but is also researching related technologies.