In a rare move, the Government and Central Bank of China (People’s Bank of China – PBoC) is planning to open up its $27 Trillion payment market to foreign firms. Foreign firms will now be permitted to apply for licenses to enable them operate within China.
In the People’s Republic of China, local companies dominate the payment and internet space. Homegrown companies such as Alibaba dominate the industry with up to 70% share of the market – Alibaba’s AliPay and Tencent practically control the Chinese payment market.
But in a change to the status quo, it seems actors in the industry will be opening up the market to foreign companies. All things being equal, the payment app Square originating from the U.S. could operate in China soon once it is able to secure a license from the PBoC. The Square app was developed by a team led by Twitter CEO Jack Dorsey and KakaoPay which is also a payment app based on South Korea.
This decision by the Chinese government to open up its payment sector to foreign firms comes after the appointment of Yi Gang as the new PBoC Chief. Mr. Gang is an American trained economist who is known for his pro-market outlook.
What this means for Bitcoin and cryptocurrencies as a whole…
On March the 19th, it was reported by TokenPost, a South Korean media house that the new Chinese central bank head said that “bitcoin is a currency that provides freedom to anyone that uses it.” It further reports that Mr. Gang stressed that cryptocurrencies provide a high level of transparency.
Given Yi Gang’s background as being pro-market, a number of market watchers are not surprised at his positive comments towards bitcoin and cryptocurrencies in general.
Some market players are hopeful that the new PBoC chief will help lead favorable cryptocurrency market regulations in China which will in turn translate into a vibrant trading economy.
Local analyst Wei Chun says that “in summary, the Chinese government has shown a positive attitude towards blockchain technology despite its enforcement on cryptocurrency and mining operations…”