During a recent activity in Beijing, China’s former vice minister of finance, Zhu Guangyao, highlighted the need to address the issue of cryptocurrencies. He highlighted that these assets are a fundamental part of the growing digital economy. This is the importance of deepening the study of them.
The official assures that digital currencies represent a danger to financial markets. However, he adds that they cannot be ignored given the growing prominence they have at the international level. For example, it refers to the bipartisan treatment that these assets receive in the United States.
Likewise, he highlights that the approval of spot ETFs in the North American country this year is an extremely positive element. In this way, he comments that the crypto sector is experiencing a radical change on an international level. In that sense, the authorities of the Asian country must deepen the study of the impact of these assets.
We must fully recognize their risks and the damage they can cause to capital markets. However, we must also study the latest developments and related policies. Particularly the bipartisan approach in the United States. This is a crucial aspect for the development of the entire digital economy.
Zhu Guangyao, former vice minister of finance of China.
Cryptocurrencies remain under ban in China
Since 2021, Chinese authorities have kept the trading and Mining of virtual currencies under a strict ban. The aforementioned official believes that the country must address the issue of cryptocurrencies in greater depth. It is important to take into consideration that China is building a completely digitalized economy and hence the necessary interest in the crypto sector.
Currently, any company or digital currency trading platform that offers services to Chinese citizens does so illegally. Despite this, a growing number of citizens found ways to circumvent the prohibitive regulations. It should be noted that the penalties for people who fail to comply with these laws are usually severe.
The same thing happens in the field of Bitcoin mining. Until 2021, China was the global epicenter of this industry, but with the ban the vast majority of miners were forced to leave the country. Now, the country remains an important mining hub, but these farms operate clandestinely or under the tutelage of corrupt officials.
China’s communist authorities are convinced that cryptocurrencies are an obstacle to the financial system. Particularly, they hinder the function of the central bank digital currency (CBDC) that the country has been working on for approximately a decade.
Thus, despite this institutionalized hostility against these assets, Guangyao believes that the best step is to address the Cryptocurrency sector right now.
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