China’s Former #2 Banking Official Says Fiat Currency, Bitcoin Can Co-Exist
Wu Xiaoling, the former Vice Governor of the People’s Bank of China, said over the weekend that virtual currencies like bitcoin could co-exist with a existing fiat currencies, according to various forums and Chinese news reports.
Wu, currently a member of the Standing Committee of the National People’s Congress and Vice-Chairperson of the NPC’s Financial and Economic Affairs Committee, was a keynote speaker at the Sanya International Financial Forum held at the Sheraton Sanya Hotel on Hainan Island.
Other prominent speakers at the event were bitcoin exchange Huobi CEO Leon Li and former vice-president and executive director of the Hong Kong-listed Bank of China, Wang Yongli.
In her speech, Wu specifically stated that “legal tender” and “digital currency” can co-exist in human society. She said that crypto-currency can become a currency, depending on the “participant’s accreditation and the currency’s stability.”
In addition, she noted that the open source distributed information sharing technology over the Internet can be used to transmit currency efficiently and at a low cost.
However, Wu said that without a supply adjustment mechanism, there will be no solution to virtual currency fluctuations. Such currencies can become financial products and assets, but couldn’t be a good currency.
Wu Xiaoling, China NPC Finance Committee deputy director – “Private digital money can coexist with government money.” pic.twitter.com/zYhEnqtvBn
— Huobi (@huobicom) December 15, 2014
Wu’s statement is fairly significant because earlier in the year the Chinese government reacted with animosity and distrust towards bitcoin trading in China, prohibiting banks and other financial institutions from dealing with bitcoin exchanges and companies. Since then, the situation has cooled down to degree and China-based bitcoin exchanges like Huobi, OKCoin, and BTCChina – big players in the global bitcoin ecosystem – have been operating and launching new products.