According to a Chinese Central Bank Official, Cryptocurrency Adoption Is a "Major Issue"
Wen Xinxiang believes that cryptocurrency also causes problems for banks' payment services, undermining the influence of clearing agencies.
Why Cryptocurrency Adoption Is a Major Issue in China?
The growing acceptance of cryptocurrencies such as Bitcoin (BTC) poses a significant risk to the existing financial system, according to the senior official at the Chinese central bank.
Wen Xinxiang has voiced concern about the rising popularity of fiat-pegged stablecoins.
Wen Xinxiang also claimed that the purported anonymity of cryptocurrencies makes them an appealing instrument for enabling criminal activities such as money laundering, asking for additional steps to combat with crypto:
“Virtual currency poses a significant problem. When the conventional financial system responds to competition from large digital businesses in the financial industry, it may also depend on traditional mechanisms such as law and supervision to boost anti-monopoly efforts and promote personal privacy and information protection.”
China Suspended Crypto Trading Transactions & Shut Down Mining Farms
Wen Xinxiang's comments confirm the Chinese government's anti-crypto position as the country has continued to crack down on crypto trade and mining this year, with local authorities shutting down several mining farms and stopping crypto trading operations.
In July, PBoC Deputy Gvernor Fan Yifei voiced concern about stablecoins, noting that the rate of development in the private payments system was “very alarming.”
Despite the Chinese government's reservations about stablecoins, some local players are experimenting with decentralized stablecoins linked to the digital yuan, China's central bank's digital currency.
