Chinese Economist Urges Government to Rethink Crypto Ban – Warns of Missed Tech Opportunities
The South China Morning Post reported on Monday that a former adviser to the Chinese central bank, the People’s Bank of China (PBOC), has asked the government to re-evaluate its ban on cryptocurrencies.
Huang Yiping served as a member of the Monetary Policy Committee at the People’s Bank of China between 2015 and 2018 and is currently posted as Professor of Finance and Economics at the National School of Development, Peking University. He acknowledges that a ban on cryptocurrencies may be practical for China for the time being, and the former bank advisor insists that the government should consider whether such policies can last long. He further adds that a permanent ban on crypto-related products could certainly result in missed opportunities for technologies like blockchain that are “very valuable” to regulated financial systems.
In September 2021, the Chinese government declared all crypto currency activities illegal, claiming that crypto currency provided a breeding ground for criminal activities and affected the country’s economic and financial system. Despite the crackdown by the Chinese government, a large number of crypto investors are still in cheesy and according to blockchain analytics firm Chainalysis, China is among the top 10 countries where bitcoin and cryptocurrencies are most prevalent and apart from last November’s collapse. We learn that crypto exchange customers account for eight percent of this and FTX had over 5 million active users before the collapse. Additionally, there has been a significant increase in cryptocurrency activities in China related to its mining. According to data from the Cambridge Center for Alternative Finance (CCAF), 20 percent of the total bitcoin rate from September 2021 to January 2022 was attributed to traffic from China. explains the central That suggests that there is significant underground mining activity in the country… As the ban has been announced and time has passed it seems that underground miners have become more confident and satisfied with the security provided by local proxy services. Of course he further adds that the PBOC is trying to adopt its own central bank digital currency (CBDC) as well as the digital yuan or e-CNY which is still in its testing phase and the central bank announced in December last year. While counting the digital currency as part of its money supply, former PBOC director general of research Xie Ping recently said that China’s CBDC use has been “low” and “highly inactive”.
