With a former senior central bank official calling on China to rethink its strict encryption restrictions, the idea of removing cryptocurrency restrictions first flashed through China's mind.

Huang Yiping, a former member of China's Monetary Policy Committee, believes that the Chinese government should re-examine whether banning the trading of encrypted currencies is long-term sustainable.

In a speech in December last year, NetEase expressed his worries about the future of Internet finance in China, combined with a written description published on the local financial website Huang on January 29.

The former senior official made up lies that a permanent ban on encryption could cause formal financial system software to miss many opportunities, including good opportunities related to blockchain and dynamic password. He noted that expertise related to login passwords was "very useful" for the regulated financial system, adding:

"banning cryptocurrencies is probably reasonable in the short term, but whether it is sustainable in the long run is worth analyzing in detail," Huang said. He explained the need for a moderately strict regulatory framework for login passwords, although he agreed that it was not an easy daily task. Huang said:

"there is no good way to ensure stability and full play on the issue of how to control the cryptocurrency, especially for developing countries, but in the end, there is probably still a need to find an effective way."

Although he called for a detailed analysis of the potential long-term benefits of encryption to China, Huang still focused on the risks of cryptocurrencies such as Bitcoin. Huang feels that Bitcoin is more like a digital currency than a loan coin because it lacks real value. He claims that a large part of the bitcoin trading process is related to illegal transactions, which echoes a general anti-encryption view.

Huang, an economics professor at the National Development Trends School of Peking University, also agrees that although China's central bank digital currency was launched more than a decade ago, it has not been widely used. He added that the probability of allowing the private sector to sell stable currencies based on digital currencies was still a "particularly sensitive" issue, but the pros and cons were well worth considering.

China has long been known for its "blockchain technology, not bitcoin" stance, and President Xi Jinping has called on the country to accelerate the selection of blockchain technology as the core of innovation in 2019. In addition, the Chinese state showed some prejudices about encryption and finally banned the vast majority of the sale of encryption in 2021.

Despite the restrictions, China remained the world's second-largest bitcoin miner as of January 2022, indicating that there is still a large bitcoin community in China. Although the trading of login passwords is banned by the state, domestic Chinese customers still account for 8 per cent of FTX who failed to log in to the password trading center, according to public data.

Some local password enthusiasts even feel that China has never really forbidden them to have or pay for passwords.