Fan Long, a co-founder of Chinese public blockchain network Conflux, says China’s latest broadside against the use of cryptocurrencies in the financial sector should not be interpreted as a sign that Beijing is intent on shutting down digital currencies.

Fast Facts:

  • Fan told Forkast.News in an exclusive interview that the source of yesterday’s announcement forbidding the use of crypto by banks and other businesses was all-important, noting that it had come from three finance industry associations, which he characterized as representative of Beijing’s will, but nevertheless “semi-government.”
  • Fan said: “The Chinese government is just saying its consistent message … that they are not very happy about the highly speculative nature of this cryptocurrency or crypto market, and they are worried about the financial system risk associated with it, so they want to cool down this speculative heat.”
  • He said: “A lot of individual investors are already going through the underlying OTC market. There is a very sophisticated P2P OTC market in China, and probably it’s not something that this announcement would be able to resolve or eliminate because, well, essentially it’s just an under-the-table channel. Unless the Chinese government says they’re going to ban the holding of crypto, I doubt the OTC market will be ruled out completely, but I don’t think the government will ban the holding of crypto.”
  • China remained committed to blockchain development, Fan said, describing the government as “really ready to invest in blockchain technology … willing to support public chains [and] happy to apply this technology to anything that could help real society, the real economy.”