'The corpse of Bitcoin': Crypto skeptic's appointment to central bank casts doubt on China warming to digital assets
A vocal crypto skeptic was named the top Communist Party official at China’s central bank over the weekend, leading to more doubt over whether the nation’s hard stance against crypto actually could be thawing as the sector heats up nearby.
China banned all crypto transactions in 2021, but recently Hong Kong has softened its view, leading some industry experts to speculate that China would follow suit. But despite Hong Kong’s recent moves in the digital assets space, Pan Gongsheng’s appointment at the People’s Bank of China signals change is unlikely soon, Bloomberg reported.
In an unusually candid speech at an event in 2017, Pan quoted a study by French professor Eric Clichet in predicting Bitcoin’s imminent death.
“If you sit by the river and watch, one day the corpse of Bitcoin will float in front of you,” he said during a previous crackdown on digital assets by Beijing, according to local media.
At the time, Pan also defended China’s regulatory actions against crypto, saying he was “a little scared” to think of what would’ve happened had China not cracked down on digital assets, according to Bloomberg.
As the central bank’s top party official, Pan will have significant sway over policy and is now in the running to be the next governor of the PBOC.
His appointment comes as Hong Kong has increasingly signaled friendliness toward digital assets. The Hong Kong Monetary Authority sent a letter in April to several of its biggest banks to ask why they were not accepting crypto clients, according to a report by the Financial Times.
Last month, the region also said it was going forward with a plan to allow limited crypto trading at select exchanges. As the Securities and Exchange Commission continues to launch enforcement actions against crypto-related companies, some have expressed interest in moving abroad. In April, more than 20 companies from mainland China, Europe, Canada, and Singapore said they were moving some operations to Hong Kong, and 80 more had expressed interest in doing so, according to official figures reported by the Wall Street Journal.
Noteworthy figures in the crypto industry have also fueled speculation that Hong Kong could be a test case that could lead China to end its ban. On May 27, Binance CEO Changpeng Zhao noted in a tweet the “interesting timing” of a Web3 white paper released by two Chinese government committees ahead of the June plan to allow select crypto trading.
Interesting timing on this Web 3.0 white paper from the Beijing government tech committee with the June 1st anticipation in Hong Kong. pic.twitter.com/0Ts1UB0jnL
— CZ 🔶 Binance (@cz_binance) May 27, 2023
Earlier this year, the cofounder and president of the crypto exchange Gemini, Cameron Winklevoss, said in a tweet that he believed the next crypto bull run would not be U.S.-based.
“My working thesis [at the moment] is that the next bull run is going to start in the East,” Winklevoss wrote.