Photographer: Jerome Favre/Bloomberg

Cash May Disappear in China as Payments Go Digital, PBOC Says

Just because China’s financial regulators are cracking down on cryptocurrencies doesn’t mean they’re souring on the idea of digital money.

People’s Bank of China Governor Zhou Xiaochuan made that clear at a press conference in Beijing on Friday, saying physical cash may one day become obsolete. Zhou said the PBOC is looking into digital currencies as it pursues faster, cheaper and more convenient payment methods, even as he warned that cryptocurrencies like Bitcoin -- more often used for speculation than payments -- don’t serve the economy.

“We must prevent major mistakes that would lead to irreparable losses, so we are cautious," Zhou said during what may be one of his last public appearances before his expected retirement. "We don’t like creating products for speculation and making people have the illusion that they can get rich overnight."

China, once home to the world’s most active Bitcoin exchanges, banned the venues last year amid a broad-ranging clampdown on virtual currencies. Yet the country is still the world leader in digital payments, thanks to the popularity of platforms developed by tech giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd.

— With assistance by Tian Chen, and Jun Luo

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