Wu Xiaoling: Bitcoin is the most successful commercial application of blockchain technology, but it also has fatal weaknesses

Wu Xiaoling, former deputy governor of the People’s Bank of China and chairman of PBC School of Finance, Tsinghua University, said that Bitcoin is the most successful commercial application of blockchain technology. Bitcoin as a private currency has its market base, but it is also limited to the private currency field. Today, with the existence of a sovereign state, it cannot replace the fiat currency issued by the state. Bitcoin, even as a private currency, has fatal weaknesses because the currency itself must have a certain stable value, but the value of Bitcoin fluctuates greatly. At present, the regulatory authorities of various countries do not generally recognize the properties of Bitcoin as a currency, and basically treat it as a digital asset.

Wu Xiaoling also pointed out that the digitization of currency must be rooted in the needs of transactions and investment and financing. The attributes of digital assets may be a currency, virtual goods, payment instruments, or securities in different scenarios. For the financial activities of the above nature, there are currently mature management rules, and the financial asset activities required for different asset attributes of digital currency are also the same. The existing regulatory framework needs to be followed. Innovation is not a subversion of all financial laws. In the future, the digital currency will increasingly be integrated into social behavior, and we must have a prudent and objective understanding of it.