A representative of the Bank of China affirmed that the country is preparing to allow security token offerings (STOs) within a strict regulatory framework.
During the Financial Finance Technology Summit in Beijing, Weimin Guo, chief scientist of the Bank of China, expressed his views about the current state of the cryptocurrency industry.
According to Guo, China’s Digital Currency Electronic Payment (DCEP) would play a significant role in tackling the issues that traditional payments systems have across the nation. He said that the digital yuan would focus on supporting the nation’s retail operations. And, eventually, expand its use towards wholesale and more complex businesses.
Once this is achieved, Guo said that China would be opening the doors to security token offerings (STOs). These types of digital assets are regulated financial securities that are backed by real-world tangible assets such as stocks, bonds, or real estate. The Chinese bureaucrat affirmed that STOs would be allowed to launch within a “strict regulatory sandbox mechanism.”
Moreover, Guo argued that Bitcoin is a “failed experiment.” He maintains that the flagship cryptocurrency was not launched in a good time. Although the technology was needed “sooner or later,” its success depended on the right time.
Launching Bitcoin on the perfect time would have been able to trigger a ripple effect expanding its mass adoption quickly. But, unfortunately, this was not done correctly.
He also stated that Bitcoin was launched with the “wrong goal.” Instead of trying to solve the main setbacks of traditional payment gateways, it was set to combat the global financial system. Guo believes that such a purpose is nearly impossible to achieve and this is what could have caused Bitcoin to fail.
Guo’s remarks come after Zhou Xiaochuan, the president of the Chinese Finance Association and former governor of the People’s Bank of China (PBOC), said that the country is making significant strides towards the development of the DCEP for retail and international settlements.
Zhou stated that one of the main issues that have been taken into consideration before rolling out the digital yuan is the relationship between monetary and fiscal policies.
“The world is facing a low-inflation environment. In this case, we need to study monetary policy to determine what the purpose of monetary policy is, and whether to emphasize the independence of monetary policy more.”
More so, the People’s Bank of China, the country’s central bank clearly stated that it would oversee the regulation of new technologies, inclusive of blockchain/cryptocurrency.
According to a report from the state-run Xinhua News Agency, this effort is spearheaded by the People’s Bank of China (PBoC). During a National Technical Committee meeting, PBoC’s vice president Yifei Fan said that the bank intends to introduce better regulations to the entire fintech sector.
The new proposed set of regulations will be applied to all subcategories of the country’s burgeoning fintech industries. According to Xinhua, the bank has divided the industry into 17 different categories, which include the likes of cloud services and artificial intelligence.