After a bitcoin crackdown, China now calls it an 'investment alternative' in a significant shift in tone

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BOAO, China — China’s central bank is now calling bitcoin an “investment alternative” — marking a significant shift in Beijing’s tone after a crackdown on cryptocurrency issuance and trading nearly four years ago.

Industry insiders called the comments “progressive” and are watching closely for any regulatory changes made by the People’s Bank of China (PBOC).

“We regard Bitcoin and stablecoin as crypto assets … These are investment alternatives,” Li Bo, deputy governor of the PBOC, said on Sunday during a panel hosted by CNBC at the Boao Forum for Asia.

“They are not currency per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.”

Bitcoin was up around 2% at 12:25 p.m. Beijing time at over $57,134.04, according to Coindesk data.

In this photo illustration, the Bitcoin logo is seen on a mobile device with People’s Republic of China flag in the background. (Photo Illustration by t/SOPA Images/LightRocket via Getty Images)Budrul Chukrut | SOPA Images | LightRocket | Getty Images

China was once one of the world’s largest buyers of bitcoin.

But in 2017, China banned so-called initial coin offerings (ICOs), a way to raise money for crypto companies by issuing digital tokens. That same year, authorities shut down local cryptocurrency exchanges. The moves were prompted by concerns about financial stability.

As investment alternatives, “many countries, including China, are still looking into it and thinking about what kind of regulatory requirements. Maybe minimal, but we need to have some kind of regulatory requirement to prevent … the speculation of such assets to create any serious financial stability risks,” Li said.

He added that the central bank will keep its current regulations on cryptocurrencies.

Li’s latest comments highlight a potential shift in tone from the PBOC.

Flex Yang, CEO and founder of Babel Finance, called the comments “progressive” in an interview with CNBC on Monday. Babel Finance is a crypto financial services company.

“I think it is quite significant and is definitely different to their previous statements or positions on public cryptocurrencies,” Vijay Ayyar, head of business development at cryptocurrency exchange Luno, told CNBC by email.

Bitcoin appears to have become more mainstream in