Bitcoin Forum

Wang Yongli, Former Vice President of Bank of China: Countries that lack sovereign currencies will not succeed in using cryptocurrencies as legal tender.

Wang Yongli, former vice president of Bank of China and chief economist of Shenzhen Neptunus Group, pointed out in an interview. Some countries lacking a sovereign currency lack the most basic understanding of currency, and use fully decentralized digital encrypted assets such as Bitcoin as legal tender. The economic and social operations will be severely disrupted due to its own price fluctuations. The country has no means of control and can only go to destruction on its own.

I think his statement is unreasonable.

In the past ten years, China has said that Bitcoin is only used as a personal investment, without large institutions or government endorsements. After large institutions began to invest in Bitcoin, they said that Bitcoin is a Ponzi scheme, a playground for capitalists. When some countries recognized it as legal tender, they used the lack of sovereign currency as an excuse to ignore the facts. I very much look forward to what new excuses the Chinese government will have when more and more sovereign countries in the world use Bitcoin as legal currency.

I am a Chinese, but if the country loses a key strategic opportunity in the era of digital currency pre-emptive due to the nonsense of a certain person, these historical and national sinners will surely be stinking for thousands of years.

It's not unreasonable because he is right that it cryptocurrencies is volatile and not everyone can keep up with the prices moving up and down, businesses could go bankrupt any time of the day when the prices started going down.

Most businesses today use payment processors like BitPay, that automatically convert the crypto funds to USD so I'm pretty sure that volatility won't be problematic, not for businesses anyway.

Because of the volatility of cryptocurrencies, of course the economies of countries that accept Bitcoin as legal tender are always going to be under this risk. But fiat money also has risks as we all know. As long as the governments continue to print too much money, the value of fiat currencies will continue to decrease. And it isn't a good thing at all in the long run.

I don't think so
In fact, when the Bitcoin standard system is implemented within a country and Bitcoin is used as the pricing unit, the price labeling and payment are all in Bitcoin or smaller units such as sat, then the exchange rate fluctuation of Bitcoin relative to the US dollar will be lost its means in the domestic transaction scenario. Just as we use RMB as price standard and pay every day, we never need to care about the fluctuation of the RMB against the US dollar. Only when foreign trade involves cross-currency settlement will this issue be considered. When foreign trade merchants have another option in addition to USD settlement, and this option is more free and less over-issued, how will everyone choose?

Even if this could be true, I believe just like every one in cryptocurrency space, some.of our assets are also held in stable coins which I would believe that most of this businesses will look into. Everyone understands the volatility in Bitcoin price and yet we have all this big corporation's in institutions that have invested heavily in Bitcoin. And we have also had about other businesses that have been accepting Bitcoin for payments long before now, I know about 10 of such businesses in my country.

The El Salvadors move is a big step for Bitcoin and I believe they will catch up with the workings.

They can critic on that since they haven't adopted on it yet, the burden goes to El Salvador by now proving that it will work. It's a huge feat considering they are the first country to adopt fully on it and accepting it as legal tender. The thing was, it was made as legal tender and if people that don't want to use it then they shouldn't and for those who may use then they should know the risks.

The thing with critics are, they got big talk when they can't fully understand what it means about for connecting the world, they care about prices. Most of this critics are into the financial aspect of the technology and not the underlying benefits that it may gave to the masses.

If they didn't get it right with fiat and the banking system, it doesn't mean they won't be okay with cryptos. Of course, someone working for a bank would claim otherwise because banks are interested in getting more customers and cannot admit that they might be unnecessary and even obsolete. Bitcoin volatility can be a big challenge, of course, but they have USD in El Salvador, so the prices can be fixed in fiat with Bitcoin being used as a payment. Another challenge is the fees, but luckily, they're currently relatively normal. That being said, no level of BTC adoption can solve the huge economic and political problems of this country, but banks can't solve them either.

Your English skill is far better than any average Chinese people. I am sure you don't live in China. Anyway, what Mr. Wongli said, reflects the mentality of any government that wants absolute control on their internal matters as well as poke their nose to other's internal matters. For example Tibet, Hongkong, Taiwan, Arunachal Pradesh, Indian ocean etc.

I personally want China to loose this strategic benefits for greater good and world peace because they are becoming a global threat. But anyway, when I see the position of the speaker, it makes sense because he is only echoing what his master wants him to echo.

So you're saying Communists saw something that they cannot control and they don't like it...... hmmmm.... you don't say.  ;D

I agree with this observation, usually, if Bitcoin or other cryptocurrencies if used as payment particularly in Bitpay it was instantly converted into the US dollar or the native currency of that country where it was used if it was only supported so there's nothing to be afraid of,  I think they missed out something about the word "legal tender" lol. Bitcoin and other cryptocurrencies already exist for almost 10 years and there's is no single country that was bankrupt or disrupted because adopting it as a legal tender doesn't mean that you are throwing out your sovereign (fiat) currency into the garbage bin, Bitcoin serves as an alternative asset, and El Salvador can tax it so that they can generate revenue, plus they are planning to mine Bitcoin using the clean energy from geothermal power plants sounds interesting it seems that El Salvador was put on the map now as a cryptocurrency-friendly state I believe more opportunity will come to El Salvador soon.   

But what about the small scale or the individual? They will probably be overpaying for goods and services most of the time when the prices go up and would still be the same when the prices are down.

While wang yongli's statement does make a bit of sense, the problem he is talking about can be solved pretty easily. I believed I have read somewhere about a solution for such problem. Unless people there themselves try to hold it too much without proper knowledge about it. But that can also be easily fixed by doing free seminars about cryptocurrencies or bitcoin alone. So my views about this guy is that he is against legalization of Bitcoin since control reduces as legalization of such a currency that is decentralized (at least to an extent). And he doesn't want to admit it nor admit that the views of his, along with all the chinese leaders are wrong. And so, he wants to talk shit about the progress of el salvador and wishis it to fail misserably. The pride and control over the people of these leaders depend on it.

First - It's China. China banning cryptocurrency shows how much they hate it.
Second - It's a banker. We all know bankers are life time haters to cryptocurrency.

So it's quite expected from him to make such statements. Nobody cares what Wang Yongli says.
Bitcoin can survive without him and without China.

I think as more of El Salvador’s population migrates to using btc, goods and services will be natively priced in sats and volatility will only exist when converting to or from USD. I am not an economist or anything but that is my speculation.

These arguments are not groundless and make sense. Any state must accept the country's budget and plan its economic development. In bitcoins, the El Salvadorian government will not be able to do this due to its high price volatility. Or it needs to be done in dollars, or in national currency. However, even issuing salaries and pensions will be difficult, since recalculations will constantly have to be done. It is also impossible to compare the indicators of economic development in different periods in bitcoins, you need to rely on more stable means of payment, and such can only be fiat currency, decentralized cryptocurrency cannot be.
In any case, the experience of the El Salvadorian government will be useful for the world community.

if someone already holds bitcoins, and a country like el salvador has legalized bitcoin, they'll know there's going to be a risk they're going to face, but i'm pretty sure they'll be ready to tackle all the problems they're going to face in the future, including countries that criticize those who have legalized bitcoin, such as China, USA, etc, I think paper money also has a high risk, because when they print too many banknotes, the paper money will decrease, we will see if El Salvador can be better, after legalizing bitcoin.. .

Definitely. We don't argue using the Gold then why do the same if we are using crypto currencies? I mean let the market fluctuate, that's its nature and a reality based on the decentralisation. Businesses and Institutional investors are actual one of the strong point for the support of crypto. If that guy is calling it ponzi based on that then I am sorry, Gold Sovereign Bonds are ponzi too, fiat is printed and controlled by government so it's ponzi too?

What is his point exactly?  ::)

I have zero faith in the words that come out of any Chinese official - whether in is government or private enterprise. Frankly the government in China has made it clear there is very little distinction between public and private enterprise - CCP officials reside in every large company, having substantial control of it if politics get involved in any way. Current sentiment by the Chinese government (aka the few rich elites sitting at the top) is that Bitcoin is damaging China's reputation due to the dirty fuels used by their mining operations, so they are talking badly about it at any opportunity. The Chinese government is one of the most manipulative in the world when it comes to the Yuan, they would eventually love it to become the premier reserve currency of the world in place of the Dollar - except nobody trusts them so they have to resort to maximizing trading benefits with it. China sees other countries choosing new currencies as a threat to their future ambitions, but instead of becoming a more desirable country they choose the path of oppression due to Xi Jinping's policies.

I would have understood other arguments, but not this one.
It is exactly the opposite, countries that have pegged their currency to another one like Bulgaria, Qatar, or even Denmark, and those that have gone one step forward and are using totally a different currency know those risks well better than others. they also have done this exactly because of the currency fluctuations and some have achieved greater stability because of those.

When you are looking for a country that might have problems you should look at those that have done exactly the opposite, removing the peg and printing money in excess, those would be in real trouble adopting a currency like bitcoin in the first period as they would simply have to balance two of them, one which is flawed and one which they have no control over it, indeed a problem not solvable for a 3rd world country in a crisis.


Lol, and how is this a new thing?
If this is a problem for you, why are you here and how do you plan on using bitcoins in your daily life?
Oh wait, you don't buy stuff right now, guess what, nobody is forcing you to do so, just like nobody is forcing you to sell your gold or shares or land, it just allows you to sell them for other assets if you want, legally!

Leaders of rich countries all hate bitcoin because it threatens their existence. I’m seeing the recent obsession by high ranking officials as extremely bullish for bitcoin. They are all scared but bitcoin is going nowhere, we are coming for them.

Oh no, not the Chinese government again bashing other countries and trying to interfere with something that doesn't concern them. That's obvious that his statement is unreasonable. China just being China over here. Their government won't let their people have any power at all. Imagine if the whole world makes bitcoin a legal tender, and China being forced to do so (having no other option but to follow what's happening). Would be fun to see their government giving power to their people.

Of course El Salvador will be better, the adoption will attract foreign Bitcoiners from endangered countries. People will invest in El Salvador, this will definitely make the economy better than it has always been.

i guess, Chinese govt just let other governments do what they want to do and wait for its impact later on. yes, they don't need to interfere with other government's decision. just mind their own business. even if we say, this Chinese govt has a point, but it doesn't mean that the only possible result is what they are predicting. price fluctuations will always be here but it is how the govt will address such bottleneck. they are not the only ones thinking in this world.
and more then likely, few years from now, when everyone else is already into crypto, Chinese govt will change their stance towards crypto...

I live in China now. In fact, there are many Chinese who speak English very well. Personally, I have studied at UNSW, so my English skills may be slightly better.

There are some people in China who lack the understanding of Bitcoin, but they speak rashly. Such people exist in all countries, making their country lose the opportunity to develop digital currency. If Bitcoin fails, as the leader of the rise of digital civilization, as the last refuge for mankind to oppose power. I will hold it to zero, and all the funds, time and effort I have invested in it will automatically be donated to this great and failed human cause.

BTC=BTC. So it doesn't matter, I think this is what most of the negative mentality is coming from.

I don't think we are overpaying if we treat bitcoin like that. Been using bitcoin for most of my basic needs like electricity and internet and phone but I don't see a problem with that nor regret my decision of using BTC as "money".

But I'm not surprised by the statement though, what do you expect from a country that wanted to control everything, capital flight? Nah, China will not allow it through BTC.

El Salvador doesn't have their own currency so they need to adopt one and they chose BTC. China may have another view of it but why should it matter to Bukele?
The Chinese Government is known to want control over their people, there is nothing wrong with that as all government wants to control. But with BTC, it makes their control a lot harder for China's control.

We see that people who are threatened by Bitcoin's success keep moving the goalposts. Big nations like the United States, China and the European Union are trying to bully a small country like El Salvador because they won't play by their rules. There is not much that they can do because El Salvador has more to gain than they have to lose by adopting Bitcoin and when other developing nations see this they are also likely to adopt Bitcoin.

Bitcoin's decentralized system is to allow the objective laws of algorithms, mathematics, and physics to override human power, surpass and rule all people and organizations that are inevitably corrupt and declining. Bitcoin cannot allow itself to be dominated and ruled by any individual or institutional force.

I agree with you, but rather than the government controlling the people, I think it is more appropriate to say that the government influences the people in its own way.

Exchange rate fluctuations do not affect instant transactions as Bitcoin is only a unit of spot payment. If people don't want to hold Bitcoin they can convert to other currencies, the government doesn't force them to hold.
The demand for Bitcoin is increasing so the long-term exchange rate volatility is positive and it is good for holding and accumulating.
The Chinese spokesman's statement is just a cover-up and it is not reasonable.

Everybody is forced to trade for USDT which only holds 3% of its assets as USD-CASH. No exchange on earth can redeem, and if do redeem they generally have limits like $50k/month, and just a few withdrawls. Like Hotel Calif, you can entire a bitcoin exchange, but you can never leave.

Sure you can get USDT, and go to another exchange, but at the end of the day, everybody knows that USDT ain't got the cash at the bank to cover the withdrawl.

The only business using bitcoin, is MUSK who just lost $100's millions on his trade to save his losing company.

Nobody buy's crap with bitcoin, if I transfer $10, I have to pay $15 fee, are you people just stupid, or ignorant? Why in the hell do you think that 'business' use bitcoin? The only businesses that trade bitcoin are the scam companys.

Yes you're right. so volatility does not have too much impact. their worries were exaggerated. after all, when bitcoin is used as a means of payment, they certainly don't plan on holding it for long. when the transaction is complete, they will immediately exchange it to FIAT.

Unreasonable or stuck with tradition.
Bitcoin is made for it and not an asset. I don't know if it's volatility they are scared about or is it innovation.
Perhaps it is because they want their new digital currency to be used more than Bitcoin on top.
Who knows, after this legal tender resolution more countries will do the same thing and that fact scares the hell out of them.

I like the way you said that even you are a Chinese you are not agree with the principle or belief of your Country's leader. We can aee that their tactics is beyond their garbage mind. No offense but China is good and wise but they are using their power to influence the world and create such fud that later on they will use against us. Chinese people are so smart and their goverment knew that once bitcoin adoption grows massively intense and yet their not riding the tides yet then they can be overtaken by others. So create fud first and ride. Its just about social media awareness. They are now saying El Salvador move isnt good. Another shit show degrading from China again.

manipulation is just an old trick to break the order and china has done it many times...

look at how china wraps covid as if it is a very deadly disease through its media and now they want to fight bitcoin, then this is a war they will not win. the last few decades china has been very confident in its abilities without realizing that the Bitcoin community is the strongest in the world and is not easily swayed.

That's the thing though. Individuals are not obligated to use bitcoin, only businesses are (and only if they are asked to). So for those individuals who don't want to deal with price volatility, they could simply continue to use the dollar, or a stablecoin instead.

It's funny if you think about it, China doesn't want other countries to have a say about their country's affairs but they can do these kind of stuff, talking about other countries, another box ticked to prove that China is in fact a hypocritical entity.

China is a greedy country, they will hate everything that the government can't control, one of which is bitcoin, they must hate bitcoin because they can't control bitcoin, the Chinese state must have a negative view of el salvador, because el salvador has legalized bitcoins..

we can't do anything about what is happening in the Chinese government, because we know that they really want to be able to control all sectors that are very profitable without bitcoin exception. this is a natural thing because by controlling at least they have a role that can be done, but of course it is not easy to do because many countries will also do the same thing. and it's not easy to control bitcoin because no one does anything about bitcoin's movement apart from the market itself.

It is natural that China has a different view from El Salvador, but they should be able to be more advanced than other countries because they are famous for their mastery of mining in this world, but if other countries are ahead with bold actions, they should have self-introspection, don't intervene.

One thing is very much clear here. China will never accept Bitcoin as their they don't see any advantages to it.

It's simple and no-brainer. China won't use something created by their competition. They take it as a threat and you cannot blame them from that. I think his statement makes sense. But it doesn't apply to everybody. It only applies to them.

We the enthusiast doesn't need to consider their statement as their opinion is for their goods and not ours. So I think, we just had to respect their decisions and perspective with Bitcoin and do our stuff. That's the best thing to do here.