Former Bank of China Member Stated About Bitcoin and Cryptocurrencies: Why Banned, Will Ban Be Lifted?

Huang Yiping, professor of finance and economics at Peking University’s National Development School and former member of the Monetary Policy Committee of the People’s Bank of China cryptocurrencies spoke about.

On China’s ban on cryptocurrencies, Yiping said they are digital assets, not currencies:

“There are several factors to consider when taking a stance on cryptocurrencies. First, cryptocurrencies such as Bitcoin are not literally currencies but more like digital assets in that they lack intrinsic value.

Moreover, all studies bitcoin showed that about a quarter of account holders and half of all trading activities are linked to illegal transactions.”

Yiping, a former member of the People’s Bank of China, said the following about China’s ban on cryptocurrencies:

“Secondly, the regulatory attitude towards cryptocurrencies and digital assets depends on the maturity of the country’s financial system and regulatory regime. As you know, the Chinese government currently prohibits cryptocurrency trading in China.

The main reason for this is that our country still faces significant challenges in the fight against money laundering. Moreover, the country retains control of many capital accounts, and if digital assets such as cryptocurrencies could be traded freely, this would cause more problems than benefits.”

China’s ban on cryptocurrencies may not be sustainable in the long run, according to a former member of the People’s Bank of China:

“Finally, long-term trends need to be fully taken into account. Banning cryptocurrencies may be practical in the short run, but it’s worth doing in-depth analysis to see if it’s sustainable in the long run.

Some of the new digital technologies brought by cryptocurrencies are valuable to the official financial system, including tokenization, distributed ledger, blockchain technology, and the like. A prolonged ban on cryptocurrency trading and related activities risks missing out on important digital developments, and bans may not be effective for long.

There is no particularly good formula for how cryptocurrencies should be regulated, especially for a developing country, but ultimately an effective approach may need to be found.”

*Not investment advice.

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