China is sounding the alarm on crypto assets that are pegged to fiat currencies. The country’s leading banking official says that such stablecoins pose a risk to the global monetary and payments system, according to a CNBC report.
The report quotes the deputy governor of the People’s Bank of China (PBoC), Fan Yifei, who says that ‘some measures’ have been taken to contain the ‘risks and challenges’ posed by privately issued global stablecoins.
“Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system, etc. We are still quite worried about this issue, so we have taken some measures.”
The report further states that the PBOC’s deputy governor views decentralized cryptocurrencies as speculative financial instruments that could destabilize financial security and society at large.
“These [digital] currencies have themselves become speculation tools. [They are potential threats to] financial security and social stability.”
Yifei’s statement coincides with China’s continuing crackdown on Bitcoin mining and the imposition of restrictions on crypto trading-related businesses. China’s efforts to promote its central bank digital currency, the digital yuan, however, continue to gain steam.
The portfolio marketing vice president of crypto-focused venture capital firm Sino Global Capital, Sally Wang, says China harbors global ambitions for the digital yuan.
“According to the current trend, China is separating the concept of cryptocurrency from blockchain and advocating tokenless blockchains. It aims to turn DCEP/digital yuan into a truly global currency.”
Wang further says that the ‘challenge’ for China with regard to decentralized cryptocurrencies is that it can’t control them.
“Cryptocurrencies, especially Bitcoin, are a challenge for Beijing as the PBOC cannot track the flow of funds. The PBOC has always been extremely concerned at the destabilizing risk of capital outflows.”
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