Chinese Economist Urges Government to Rethink Crypto Ban – Warns of Missed Tech Opportunities – Regulation Bitcoin News

An economics professor and former adviser to the People’s Bank of China has called on the Chinese government to reconsider its ban on cryptocurrencies. He warned that banning crypto activities could result in missed opportunities that are “very valuable” for regulated financial systems.

Chinese economist warns of missed opportunities due to crypto ban

A former adviser to China’s central bank, the People’s Bank of China (PBOC), has urged the Chinese government to reconsider its ban on cryptocurrencies, the South China Morning Post reported on Monday.

Huang Yiping was a member of the Monetary Policy Committee of the People’s Bank of China between 2015 and 2018. He is currently a professor of finance and economics at the National Development School of Peking University.

Acknowledging that banning cryptocurrency may be practical for China for now, the former central bank adviser stressed that the government should consider whether such policies are sustainable in the long term. He warned that a permanent ban on crypto-related products could result in missed opportunities in technologies like blockchain, which are “very valuable” to regulated financial systems.

In September 2021, the Chinese government declared all crypto-activities illegal, claiming that crypto disrupts the country’s economic and financial order while providing fertile ground for criminal activities.

Despite the ongoing crackdown by the Chinese government, a significant number of cryptocurrency investors are still in China. According to blockchain analytics firm Chainalysis, China is among the top 10 countries with the highest adoption of crypto. Additionally, FTX’s bankruptcy filing last November shows that mainland users made up 8% of the failed crypto exchange’s user base; FTX had over 5 million active users before it exploded.

Furthermore, cryptocurrency mining activities have increased in China. According to data from the Cambridge Center for Alternative Finance (CCAF), traffic from China accounted for approximately 20% of the total bitcoin hash rate from September 2021 to January 2022. The center explained: “This strongly suggests that significant underground mining activity has formed in the country. .. As the ban went into effect and time passed, it seems that underground miners have become more confident and satisfied with the protection offered by local proxies.”

Huang noted that the PBOC is trying to boost adoption of its central bank digital currency (CBDC). Although the digital yuan, or e-CNY, is still in its experimental phase, the central bank began counting the digital currency as part of its money supply in December last year. However, former PBOC Director General of Research Xie Ping recently said that China’s CBDC usage was “low” and “very inactive”.

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China, China Crypto, China Crypto Ban, China Crypto, China Central Bank, China Economist, China Government, China Government Crypto Ban, Digital Yuan, e-CNY, PBOC, pboc Crypto

Do you think China will establish a more crypto-friendly crypto framework in the near future? Let us know in the comments section below.

Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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