Former PBOC governor: “The essence of cryptoassets is fitness for payments… beware regulatory arbitrage”

Doohyun Hwang

Summary

Zhou Xiaochuan, former PBOC governor, said the core of cryptoassets and blockchain is not performance but fitness for real user needs and payment use cases.
Zhou said the superiority of a payment system is determined not by the performance of a single technology but by overall fitness, raising questions about the practical usefulness of cryptoassets.
Zhou said cryptoassets are being used for illicit financial activity, and that digital currencies are being abused for wire-fraud scams and other illegal acts, making it harder to trace funds.

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Zhou Xiaochuan, a former governor of the People’s Bank of China (PBOC) and a symbolic figure in China’s financial policymaking, stressed that the core of cryptoassets and blockchain technology lies not in sheer performance but in how well they fit real user needs and payment use cases.

According to local media on the 26th (local time), Zhou, speaking at the Boao Forum for Asia, questioned the practical usefulness of cryptoassets, saying that “the superiority of a payment system is determined not by the performance of a single technology but by overall fitness.” While discussion of blockchain technology itself is possible, he argued that what matters is how efficiently it operates in real-world economic settings.

Zhou also voiced strong concerns about illicit financial activity involving cryptoassets. “Behind the convenience that digital currencies provide for payments, they are being exploited for illegal activities such as wire-fraud scams,” he said, adding that “because funds can be rapidly broken up and transferred, the difficulty for authorities to trace them rises sharply.”