China’s central banking has also taken another swipe at Bitcoin (BTC) and stablecoins – asserting that they pose a risk to financial security.
Fan Yifei (Deputy Governor of the central People’s Bank of China) answered a reporter’s question about cryptoassets at a recent press conference.
Fan, Sina Finance, stated that cryptoassets had ‘become an speculative instrument’ that carries ‘potential risk that threaten financial security or social stability’
Fan said that crypto has also “become a payment instrument for money laundering or illegal economic activities.”
He also stated that some “stablecoins” issued by commercial organizations, especially global stablecoins could pose a risk to the international monetary and payments and settlements systems.
USD-backed stablecoins have a high popularity in China where they can be used to purchase BTC and other altcoins. However, companies such as Facebook, which has its own global stablecoin plans, could be affected by the PBoC’s stance.
Fan concluded that the PBoC was still quite concerned’ about this issue and took the necessary actions. While he did not rule out additional measures, he also used the opportunity to promote Beijing’s alternative to crypto markets, the digital yuan.
Although the PBoC stated that plans were in place to move the token to the next stage in Beijing for the Beijing Winter Olympics next winter, it did not claim that a complete national rollout had been done before the games.
Comparatively, the Bank for International Settlements stated in June that cryptoassets were speculative assets and not money. They are often used in cases for financial crime. The BIS is also preparing for central bank digital currencies, (CBDC) and claiming that they ‘open up a new chapter in the monetary system.
Sally Wang of Sino Global Capital and Cheeseman, the FTX Exchange’s head for over-the-counter institutional sales and the FTX exchange’s chief of over-the counter, wrote some analysis for Techflow. They said that cryptocurrencies, particularly bitcoin, pose a problem for Beijing as the PBoC is unable to track funds flows.
‘The PBoC was always concerned about capital outflow instability. […] One could call China’s recent policy shifts a “state attack” on Bitcoin. The authors stated that its survival would be a testament to its durability.
Major Chinese exchanges such as Huobi and OKEx are experiencing declining volumes due to the tighter restrictions imposed by the Chinese government. It is clear that the Chinese crypto landscape has changed dramatically in a short time,” Wang shared on Twitter.
BTC trades at USD 33.2224 at 07:24 UTC and is down more than 4% per day and 5% per week.