Crypto Critic Could Be Put in Charge of China’s Central Bank

People’s Bank of China

A Chinese economist who once envisioned bitcoin’s “corpse” could become head of the country’s central bank.

As Bloomberg News reported Monday (July 3), the elevation of Pan Gonsheng as top Communist Party official at the People’s Bank of China (PBOC) is an indication that the country isn’t likely to soften its stance on cryptocurrency.

With that move, Pan becomes candidate for PBOC governor, a signal that the bank will maintain its position that all crypto transactions are illegal. The report notes that Pan’s appointment revived some past comments he’d made on the crypto sector.

The appointment Saturday also surfaced some historic but unusually colorful comments for a Chinese bureaucrat, which Pan made in the midst of an earlier clampdown on crypto.

“If you sit by the river and watch, one day the corpse of Bitcoin will float in front of you,” he said during an event in 2017. He had also defended regulatory action against the digital currencies and said he was “a little scared” of the idea of his country not outlawing digital assets.

This is all happening as nearby Hong Kong begins to rethink its stance on cryptocurrencies, as reported here in May.

“Hong Kong, which used to be a popular digital asset hub in the sector’s earlier years before taking a more stringent stance, is in some ways coming full circle as it attempts to woo back retail and institutional investors,” PYMNTS wrote.

China’s ban on crypto in 2021 took the luster out of Hong Kong’s appeal to digital asset companies such as collapsed crypto exchange FTX and its sister trading firm Alameda. Both had roots in the city going back to 2019 before moving to friendlier jurisdictions like the Bahamas.

Hong Kong’s regulatory commission now says that licensed crypto platforms must “comply with a range of robust investor protection measures covering onboarding, governance, disclosure and token due diligence and admission before providing trading services to retail investors.”

As Bloomberg noted, crypto executives such Circle CEO Jeremy Allaire have looked at Beijing’s quiet backing of Hong Kong’s move to restore its status as a crypto hub as sign the mainland could reverse its crypto stance. The possible appointment of Pan suggests otherwise.

“Based on my knowledge, no PBOC governor would support Bitcoin,” said David Qu, China economist at Bloomberg Economics and a veteran of the central bank. “What happens in Hong Kong is irrelevant, as the China mainland usually views Hong Kong as an overseas market.”