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An economics professor and former adviser to the People’s Bank of China has urged the Chinese government to reconsider its ban on cryptocurrencies. He warned that banning cryptocurrency activity could miss an “extremely valuable” opportunity for the regulated financial system.
Chinese Economists Warn Of Opportunities Lost Due To Crypto Ban
A former adviser to China’s central bank, the People’s Bank of China (PBOC), has called on the Chinese government to reassess its ban on cryptocurrencies, the South China Morning Post reported Monday.
Huang Yiping served as a member of the Monetary Policy Committee of the People’s Bank of China from 2015 to 2018. He is currently a professor of financial economics at the National Development School of Peking University.
A former central bank adviser acknowledged that a crypto ban could be realistic for China in the near term, but stressed that the government should consider whether such a policy is sustainable in the long term. . He warned that a permanent ban on cryptocurrency-related products could miss out on opportunities for technologies like blockchain that are “extremely valuable” to the regulated financial system.
In September 2021, the Chinese government declared all cryptocurrency activities illegal, arguing that cryptocurrencies are disrupting the country’s economic and financial order and providing a breeding ground for criminal activity.
Despite continued crackdowns by the Chinese government, a significant number of cryptocurrency investors are still in China. According to blockchain analytics firm Chainalysis, China is one of the top 10 countries with the highest adoption of cryptocurrencies. Moreover, his FTX bankruptcy filing last November shows that mainland users make up 8% of his customer base for the collapsed cryptocurrency exchange. FTX had over 5 million active users before he collapsed.
Additionally, cryptocurrency mining activity is on the rise in China. Traffic from China accounted for about 20% of Bitcoin’s total hash rate from September 2021 to January 2022, according to Cambridge Center for Alternative Finance (CCAF) data. Country… As time passes since the ban was in place, underground miners appear to be more confident and content with the protection provided by local surrogate services.
Huang said the PBOC is looking to promote the adoption of Central Bank Digital Currencies (CBDCs). The digital yuan or e-CNY is still in the pilot phase, but the central bank started counting digital currencies as part of the money supply last December. However, former PBOC Research Director Xie Ping recently said that his CBDC use in China is “low” and “very inactive.”
Do you think China will establish a more crypto-friendly crypto framework in the near future? Let us know in the comments section below.
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