Amid growing debate over crypto regulation, a former top official at China’s Ministry of Finance has urged the government to reconsider its strict ban on the virtual asset.
According to the South China Morning Post reportZhu Guangyao, vice minister from 2010 to 2018, highlighted the importance of cryptocurrencies in the digital economy of the Asian country at a recent economic forum in Beijing.
Calls For Rethinking Crypto Ban
Zhu’s remarks come at a time when the United States has drastically changed its cryptocurrency policy, prompting Chinese experts to urge a similar re-examination.
The former minister highlighted that although cryptocurrencies pose certain risks—such as the instability of capital markets and the possible misuse of illegal activities—they are also important for the development of the digital economy.
In 2017, the Chinese government banned initial coin offerings (ICOs) and ordered the closure of crypto exchanges. This attack intensified in 2021 when authorities banned Bitcoin (BTC) mining operations and declared illegal crypto-related businesses.
The full rationale behind these measures concerns financial stability and the potential of cryptocurrencies to facilitate criminal activities, including money laundering and terrorist financing.
However, Zhu pointed out that concerns related to cryptocurrencies can be effectively managed through implementation regulation rather than outright prohibition. He said, “Our current gap [with the US] is that we do not participate,” suggesting that the underground trade channels continue to operate without government supervision despite existing restrictions.
Trump Encourages Discovery, Harris Supports Innovation
As China remains strong control situationHong Kong has been moving in the opposite direction. The region is developing its cryptocurrency market to become a global hub for digital assets, operating under a unique legal framework that enjoys tacit approval from Beijing.
This difference between Hong Kong and Beijing is also reflected in the recent adoption of crypto exchange rates (ETFs) on the market at the beginning of this year, which directly funds the two largest cryptocurrencies in the market Bitcoin and Ethereum (ETH).
The volatility of global markets has not gone unnoticed by US politicians, led by the former Republican candidate and former President. Donald Trumpwho has it he insisted the need for the US to embrace digital assets to avoid allowing China to dominate the space.
Similarly, after months of silence in the physical goods industry, Democratic presidential candidate Kamala Harris has done it revealed the support of new technologies, including digital assets, to control this sector to grow.
Wang Yang, a prominent academic, also criticized China’s ban on cryptocurrency mining, referring to it as “very stupid,” as it indirectly changed business opportunities in the US.
Yang warned that if former president Trump were to regain his seat in the Oval Office, China could face “financial isolation,” potentially being removed from the SWIFT financial messaging system.
Echoing these sentiments, economist Huang Yiping, a former member of the monetary policy committee at the People’s Bank of China, has questioned the long-term sustainability of the cryptocurrency ban, suggesting it could hamper China’s ability to spend money. blockchain technology and other new things.
Ultimately, it remains to be seen whether the government will use the new regulatory framework to spearhead the adoption of digital assets or maintain its status quo, with the knowledge that the emerging sector is becoming increasingly important to the global economy.
Featured image from DALL-E, chart from TradingView.com