The former vice president of People’s Bank of China (PBoC) has spoken out about Bitcoin (BTC), calling it the most successful commercial application of blockchain technology yet, but claims it also has critical weaknesses.
Per Sina, Wu Xiaoling, who was Vice President of the PBoC between 2000 and 2008 and is now Dean of PBC School of Finance Bee Tsinghua university, has the preface of a new published Communist Party of China book on digital currencies and blockchain, claiming that no other blockchain project has achieved anything like the commercial success of the Bitcoin network.
However, she also believed that the fact that BTC is limited to the “private currency world” – as it cannot be realistically applied to the public sector. Wu added that BTC was unlikely to be used for use in lieu of fiat by a sovereign state, claiming price volatility was the Achilles heel.
Wu concluded her assessment of BTC by stating that most countries’ regulatory authorities refuse to recognize bitcoin as a currency, instead treating it as de facto digital assets.
The former PBoC executive also spoke on the issue of digital currency – a hot topic in China, where her former employer is now testing his own digital yuan token.
Wu claimed that digital currencies had to be rooted in the existing investment and financing framework if they were to succeed, and they had to stick to existing regulations – instead of “undermining” the system.
She claimed that in the future, digital currencies would be an integral part of everyday life for most Chinese citizens, meaning that leading policy makers and economists should have a firm and objective grip on them and a thorough understanding of how they work.
The comments will undoubtedly raise a few eyebrows in mainland China, where PBoC and its executives – both current and former – are relatively tight-eyed about everything to do with BTC.