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China regards bitcoin and cryptos as investment vehicles, VET and NEO prices are rising

  • The Deputy Governor of the People’s Bank of China stated that Bitcoin and cryptocurrencies are investment vehicles.
  • China will enact new regulations in the future as stablecoins gain importance as payment solutions.
  • VeChain and NEO prices are rising when the latest announcement was made.

China now views cryptocurrencies like Bitcoin as investment vehicles rather than currencies. China-friendly VeChain and NEO prices rise 35-55% amid the announcement.

Tighter regulations will emerge as stablecoins gain traction

Li Bo, the deputy governor of China’s central bank, spoke at the Boao forum on regulatory issues related to Bitcoin and other cryptocurrencies, including stablecoins.

The deputy governor went on to say that bitcoin is an alternative asset and not a currency in and of itself. The main role that cryptocurrencies should play in the future is as an investment vehicle or alternative asset. Li said:

Since it is used as an investment vehicle, many countries, including China, are investigating the regulatory environment that should be applied to this investment method and to ensure that speculation in such assets does not involve serious financial risks.

The use of stablecoins as payment solutions could quickly gain momentum; However, Li stressed that even stricter regulations than what is currently applicable to Bitcoin are needed. For stablecoins that are issued by private companies, they have to be subject to “strict supervision such as banks or bank-like financial institutions”, according to Li.

China is known as a non-crypto-friendly country as the country does not consider cryptocurrencies as legal tender. The Asian country imposed a blanket ban on all initial coin offerings (ICO) and closed crypto exchanges. However, in mid-2019, the world’s second largest economy declared Bitcoin to be virtual property with value.

Chinese tech giant Meitu has also raised $ 100 million in Bitcoin and Ether as part of the company’s treasury allocation plan. The tech company, headquartered in Xiamen, also believes that cryptocurrencies are better stores of value than fiat.

The central bank, People’s Bank of China, further clarified that Bitcoin possession is legal in the country. Mining is also legal as China accounts for around 65% of all Bitcoin mining worldwide. A recent power outage in Xinjiang Province caused Bitcoin’s hash rate to drop.

Current measures and practices will be maintained before new regulatory measures are introduced.

VeChain and NEO prices rise with China’s announcement

While the rest of the crypto market is just awakening from the massive price crash this weekend, VeChain and NEO have seen a staggering price increase – up 40% and 65% respectively in the last 24 hours.

The VeChain price is currently at $ 0.27 and the NEO price rose to $ 123.33 in the early Asian trading hours on April 19th.

China-based NEO and VeChain cryptos saw similar price growth and outperform other digital assets when China’s President Xi Jinping announced several blockchain initiatives in the country.

The crypto market has been sent into a meteoric upward rally, especially cryptocurrencies with strong ties to China. NEO gained over 70% when Xi announced the country’s push for blockchain, while VeChain surged over 110% in the following two weeks. In contrast, the rest of the cryptocurrency market gained 17% on average over the same period.

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