An Economics professor and former advisor to the People’s Bank of China has called on Chinese Authorities to reconsider their restriction on cryptocurrencies. He cautioned that banning crypto activities could result in missing out on “very useful” technologies to regulate financial systems.
Chinese Economist Urges Government To Re-Examine Crypto Ban
A past consultant to China’s central bank, the People’s Bank of China (PBOC), was asked to review its crypto prohibition, as per South China Morning Post reported on Monday.
Huang Yiping was a part of the Monetary Policy Committee of the People’s Bank of China from 2015 to 2018. Right now, he is a professor of finance and economics at the National Development School of Peking University.
While conceding that a prohibition on cryptos may be judicious for China in the near term, the previous central bank consultant forced the government to consider whether such strategies could be kept up over the long haul. He cautioned that a lasting boycott on crypto-related products could bring about missed open doors in technologies like blockchain, which are “very useful” to regulate financial systems.
In September 2021, the Chinese government announced all crypto-related activities illegal, arguing that they disturbed the country’s monetary order and gave a platform for criminal activity.
Despite the ongoing crackdown by Chinese authorities, a great many crypto traders are still in China. As per blockchain examination firm Chainalysis, China is one of the 10 most noteworthy positioning nations for crypto adoption. Furthermore, in November, customers from the mainland were the most popular customers of the now-defunct crypto exchange FTX; FTX had 5 million active customers before it collapsed.
Additionally, the number of crypto mining activities has increased in China. As per data from the Cambridge Center for Alternative Finance, traffic to the CCAF from China accounted for roughly 20% of the total bitcoin hash rate from September 2021 to January 2022. The center stated: “This strongly implies that significant underground mining activity exists in the country…As the ban is enforced and time passes, it appears that underground miners have become more trusting and seem content with the protection offered by local proxy services.”
Huang is aware that the PBOC is attempting to encourage the adoption of its central bank digital currency. Although the digital yuan (or e-CNY) remains in trial, the central bank started to count the digital currency as part of its money supply in December last year. Nonetheless, former PBOC Research Director General Xie Ping stated recently that China’s CBDC has been used in a “low” and “highly dormant” manner.
Do you think China will create a more crypto-friendly framework in the near future? Please let us know in the comments section.
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