Economist Urges China to Reconsider Total Bitcoin Ban

Former member of the monetary policy committee of the People’s Bank of China (PBOC) Huang Yiping urged the country’s authorities to take into account the long-term consequences of the cryptocurrency ban. This is reported South China Morning Post.

Huang, now a professor of economics at Peking University’s National School of Development, says blockchain technology is “very valuable” to financial systems.

“A ban on cryptocurrencies may be practical in the short term, but whether it will be sustainable in the long term deserves careful consideration,” he said.

The expert emphasized the importance of developing a proper regulatory framework for cryptocurrencies.

“There is no particularly good way to ensure stability and function in regards to how cryptocurrencies should be regulated, especially for a developing country, but an effective approach may need to be found eventually,” the economist noted.

At the same time, he agreed that cryptocurrencies, in particular bitcoin, carry many risks:

“Bitcoin is more like a digital asset than a currency because it lacks intrinsic value. And a significant part of bitcoin transactions is associated with illegal activities.”

Huang pointed out that the digital yuan was never widely adopted. The ability to allow private institutions to issue stablecoins backed by a national digital currency remains a “very sensitive” issue, he said.

At the end of 2022, the NBK included CBDC in the monetary base calculation. At that time, the circulation was 13.62 billion e-CNY (~$2 billion), which is equivalent to 0.13% of the total.

Recall that in September 2021, the People’s Bank of China, in a joint statement with nine state departments, classified operations with cryptocurrencies as illegal financial activities.

In February 2022, China tightened criminal penalties for illegally raising funds in digital assets. At the same time, the Shanghai High Court recognized bitcoin as a virtual asset with legally protected economic value.

According to former BitMEX CEO Arthur Hayes, China intends to return to the digital asset industry through Hong Kong.

Found a mistake in the text? Select it and press CTRL+ENTER