Former Chinese Central Bank Official Points Out Bitcoin’s One Key Weakness
Bitcoin is the most successful commercial application of blockchain technology, suggests Wu Xiaoling the previous Deputy Governor of China’s Central Bank. However, she also points out Bitcoin’s weakness as a private currency.
“Bitcoin, even as a private currency, has fatal weaknesses”
A highly populated country like China, taking a keen interest in cryptocurrencies, has definitely posed as a boon to the community in terms of adoption. The Chinese government is one of the first to formulate the release of CBDC. While several have been speculating the fate of Bitcoin after the release of China’s CBDC, the country recently revised its inheritance law suggesting that “virtual assets, such as bitcoins, [can] be inherited.”
In more recent updates, Chinese Central Bank’s former Deputy Governor, Wu Xiaoling recently lauded Bitcoin but also pointed out its weakness.
Wu highlighted that Bitcoin was the “most successful commercial application of blockchain technology.” A Chinese news outlet reported that Wu who currently serves as the Chairman of Tsinghua University School of Finance wrote about the same in the preface of the book, “Talking with Leading Cadres about Blockchain.”
The preface read,
“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.”
Additionally, the increase in price movement and the adoption rate of Bitcoin has left several speculating that the coin might dethrone fiat currencies. However, Wu believes otherwise as she said,
“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.”
Furthermore, she went on to suggest that several countries across the world view Bitcoin as a digital asset and not a currency. The need for transactions as well as investments and financing is what would drive digital currencies, she added.