Huang Yiping, a former central bank official said that the current crypto ban in China although beneficial might cause missed opportunities in the long run so he urges the nation to reconsider its stance on the crypto ban.
As a former central bank official contacted the nation to evaluate its harsh crypto regulations, the concept of easing the prohibition on cryptocurrencies has begun to circulate in China.
Former member of the People’s Bank of China (PBoC) Monetary Policy Committee Huang Yiping thinks the Chinese government should reconsider whether the ban on cryptocurrency trading is long-term viable.
In a lecture in December, Huang expressed his worries about the direction of fintech in China, according to a transcript that was made public by the regional financial website Sina Finance on January 29.
A permanent ban on cryptocurrencies, according to the former official, might prevent the formal financial sector from taking advantage of numerous prospects, including those involving blockchain and tokenization. He added: “Crypto-related technologies are beneficial” to regulated financial institutions.
In the short term, banning cryptocurrencies could make sense, but an in-depth review of their sustainability over a long time is necessary, according to Huang.
He also emphasized the need of creating an appropriate regulatory framework for cryptocurrencies, while also acknowledging that it won’t be simple. Says Huang
“There is no particularly good way to ensure stability and function as to how cryptocurrencies should be regulated, especially for a developing country, but ultimately an effective approach may still need to be found.”
Huang urged a thorough examination of the possible long-term advantages of cryptocurrency for China, but he also underlined that there are several hazards related to cryptocurrencies like Bitcoin BTC.
Bitcoin, according to Huang, is more akin to a digital asset than a currency since it has no inherent value. He also said that a significant portion of Bitcoin transactions is connected to criminal activity, reiterating a prevalent anti-crypto narrative.
Huang, who is now a professor of economics at Peking University’s National School of Development, also acknowledged that despite being introduced several years ago, China’s central bank’s digital currency has not been widely used.
Although the subject of permitting private entities to generate stablecoins based on the digital yuan is still “extremely delicate,” it is important to weigh the advantages and disadvantages.
With Chinese President Xi Jinping urging the nation to expedite the use of blockchain as the foundation for innovation in 2019, China has long been renowned for its “blockchain, not Bitcoin” position. The Chinese government has also shown considerable antipathy against cryptocurrencies and will ultimately outlaw almost all cryptocurrency transactions in 2021.
Despite the prohibition, China remained the second-largest Bitcoin miner in the world as of January 2022, suggesting that there is still a sizable crypto ecosystem there.
According to government statistics, mainland Chinese users made up 8% of the defunct cryptocurrency exchange FTX despite the nation’s restriction on cryptocurrency trading.
Some local cryptocurrency enthusiasts even assert that China has never really prohibited anyone from owning or trading cryptocurrencies.
