A Chinese Economist Warns of Lost Opportunities Caused by the Cryptocurrency Ban
Between 2015 and 2018, Huang Yiping was a member of the Monetary Policy Committee at the People’s Bank of China. The former central bank adviser acknowledged that a cryptocurrency ban would be feasible for China at the moment but emphasized that the administration should think about whether such measures will be long-lasting. He issued a warning that a blanket ban on cryptocurrency-related goods may lead to lost chances in fields like blockchain, which are “extremely significant” to regulated financial institutions.
The Chinese government outlawed all cryptocurrency-related operations in September 2021, stating that it had damaged the nation’s economic and financial system and served as a haven for criminal activity. A sizable portion of bitcoin investors are remaining in China in spite of the government’s continuous crackdown. China is one of the top 10 nations with the largest adoption of cryptocurrencies, according to blockchain analytics company Chainalysis.
Furthermore, China has seen an upsurge in cryptocurrency mining activity. The Cambridge Centre for Alternative Finance (CCAF) found that between September 2021 to January 2022, about 20% of all bitcoin hash rate came from traffic coming from China.
Huang mentioned the PBOC’s efforts to promote the use of its central bank’s digital currency (CBDC). The central bank began including the digital currency in its money supply in December of last year, even though the digital yuan, or e-CNY, is still in its testing phase. But according to Xie Ping, a former director-general of research for the PBOC, CBDC use in China has been “minimal” and “very inactive.”
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