China’s New Central Bank Head Is Pro-Market, Could It Impact Cryptocurrency Industry?
China’s New Central Bank Head Is Pro-Market, Can It Impact Cryptocurrency Industry?
In Sept. 2017, almost right after the PBoC and also the Chinese authorities imposed a strict ban on cryptocurrency trading, analyst Jon Creasy explained that the PBoC has obtained such route to encourage the political story of President Xi. Creasy said that the authorities will likely open its cryptocurrency marketplace once President Xi finds his administration:
Cryptweeter, a well known cryptocurrency researcher, stated that state-owned media outlets including Yicai have offered extensive coverage of VeChain, a Blockchain project and cryptocurrency established in China:
Given that the government’s support towards indigenous Blockchain endeavors and initiatives, and also the election of pro-market economists like the new PBoC mind Yi, it could be possible that some pro-Blockchain laws will be released from the mid to long-term.
In other markets like social websites, search engines, and messaging, the Chinese government has prohibited conglomerates like Facebook and Google from working within the country for a variety of reasons, but mainly to make sure that domestic platforms such as QQ and YouKu can take control over the full market with 100% of their market share.
Although the Chinese government has prohibited cryptocurrency trading, it is highly improbable that this will continue to be the situation, especially if PBoC venture Yi continues his long term initiative to liberalize the Chinese markets and its leading industries, like the obligations and fund sectors.
The election of a pro-market economist could have a positive effect on the cryptocurrency market.
In 2016, it was disclosed that the more viewers watched LOL, the game produced by Riot Games under Tencent, than the NBA finals. LOL’s professional esports league finals were hosted at the Beijing National Stadium, also called Bird’s Nest, that includes a potential of 91,000 individuals. The NBA finals have been observed by 31 mln people globally, although the LOL finals have been watched by 36 mln people globally.
Already, in weeks since the election of Yi, the Chinese government has, for the first time, permitted foreign companies to go into the nation’s payment sector and also compete against local giants like e-commerce conglomerate Alibaba’s AliPay and the nation’s biggest technology firm Tencent’s Tencent Pay.
Before his election, Yi has consistently emphasized the value of market liberalization, also has encouraged economists along with experienced financial experts who might encourage his long-term plan to boost the potency of the Chinese market.
The following target market for the Chinese authorities could be the cryptocurrency marketplace, provided that the Chinese government hasn’t led further initiatives to close down cryptocurrency pursuits and projects within China. Blockchain projects from China for example VeChain and NEO are still able to keep their progress, since the Chinese authorities had prohibited the trading of cryptocurrencies, but maybe not keeping or storing them.
VeChain, NEO, and Qtum are multi-billion dollar projects established and developed by groups located in China. In fact, the 3 cryptocurrencies are a number of the biggest cryptocurrencies in the international marketplace, with NEO being the 9th largest in the marketplace with a3.7 bln valuation.
“They have started to be picked up by mainstream press in China, most especially Yicai, who’ve been seen begging and retweeting a lot about VeChain recently. Yicai are state-owned and are one of the leading financial news and investment outlets in the country.”
The movement of the Chinese authorities and also the PBoC to allow foreign companies into its payment industry was unprecedented, and this type of positive movement towards market liberalization could necessarily lead to speculations across the cryptocurrency marketplace and its position towards it.
Payment marketplace for overseas companies
“Historically speaking, President Xi Jinping has been one of the biggest advocates of free markets China has seen in quite a while, and I expect this trend to continue. However, for the time being, Mr. Xi must attract the people who maintain him in power: the Communist Party. In my opinion, banning Bitcoin exchanges is just nothing short of temporary glad-handing. Supposing this is true, what should people do it?”
So far, the Chinese authorities and President Xi have shown willingness to keep their own plans to liberalize the Oriental marketplace, beginning with its payment industry that is mostly dominated by domestic companies.
“The domestic market is saturated with quite powerful domestic gamers, and it is relatively difficult for overseas companies to have a piece of the pie. However, there’s a chance for them to compete at the cross-border payment market.”
For circumstance – Tencent’s gaming successes
Pro-market, favors liberty
For context, China’s Tencent, that has generated a string of successful acquisitions over the last few years for example Riot Games, the game development company behind one of the most popular online games — League of Legends (LOL), exceeded that the market evaluation of Facebook at November 2017. Tencent became the first Asian firm to split the $500 bln mark, also outdistanced Facebook prior to its Cambridge Analytica Scandal, that led Facebook to decrease by almost $70 bln fall from $517 bln to $445 bln.
The benefit of Tencent and its dominance over the worldwide esports sector in addition to sociable media, messaging, and payment markets is vital to acknowledge since for the first time in its history, the Chinese government has granted the business rivalry in the finance industry.