Amid growing debate over the crypto regulatory landscape, a former senior Chinese Finance Ministry official has urged the government to reconsider its strict ban on virtual assets.
This was reported by a South China Morning Post reportZhu Guangyao, vice minister from 2010 to 2018, stressed the importance of cryptocurrencies to the Asian country’s digital economy at a recent economic forum in Beijing.
Calls for a reconsideration of the crypto ban
Zhu’s comments come at a time when the United States has significantly changed its cryptocurrency policy, prompting experts in China to call for a similar reevaluation.
The former minister emphasized that while cryptocurrencies pose certain risks – such as capital market volatility and possible misuse for illegal activities – they are also essential for advancing the digital economy.
In 2017, the Chinese government banned initial coin offerings (ICOs) and ordered the closure of crypto exchanges. This crackdown intensified in 2021 when authorities banned Bitcoin (BTC). mining activities and crypto-related businesses declared illegal.
The overarching 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 managed effectively regulation rather than outright bans. He noted: “Our current divide (with the US) is that we are not participating,” suggesting that underground trade channels continue to operate without government oversight despite existing restrictions.
Trump pushes for adoption, Harris supports innovation
While China maintains its strict rules regulatory positionHong Kong has taken a different direction. The region is actively developing its cryptocurrency market to become a global hub for digital assets, operating under a separate legal framework that enjoys tacit approval from Beijing.
This difference between Hong Kong and Beijing is further highlighted by the recent adoption of the crypto exchange traded funds (ETFs) market earlier this year, which invested directly in the two largest cryptocurrencies on the market Bitcoin and Ethereum (ETH).
The changing dynamics of the global market have not gone unnoticed by political figures in the US, led by the Republican candidate and former president Donald Trumpwho has stressed the need for the US to embrace digital assets to prevent China from dominating the space.
Likewise, Democratic presidential candidate Kamala Harris has done so after months of silence on the virtual assets industry expressed support for innovative technologies, including digital assets, to regulate this sector for its growth.
Wang Yang, a leading academic, also criticized China’s ban on cryptocurrency mining, calling it “very unwise” as it inadvertently shifted business opportunities to the US.
Yang warned that if former President Trump were to regain his seat in the Oval Office, China could face greater “financial isolation,” and could be removed from SWIFT’s 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 undermine China’s ability prevent them from benefiting from the Chinese economy. blockchain technology and other innovations.
Ultimately, it remains to be seen whether the government will implement a new regulatory framework to spearhead digital asset adoption, or maintain its current position, knowing that the emerging sector has become increasingly important to the global economy.
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