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Ex-bank official calls for end to crypto bar in China
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Ex-bank official calls for end to crypto bar in China

Daniela Kirova
Daniela Kirova
February 2nd, 2023
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  • Huang stated that banning crypto permanently could lead to a lot of missed chances
  • He argued that Bitcoin does not have intrinsic value
  • In early 2022, China was the second-biggest Bitcoin miner worldwide

Huang Yiping, a former official with the People’s Bank of China, has called on the government to reconsider its strict ban on cryptocurrency trading. He questioned its long-term sustainability, CoinTelegraph reported.

In a speech on the future of fintech in China, Huang stated that banning crypto permanently could lead to a lot of missed chances for the traditional financial system, including opportunities connected to tokenization and blockchain. He believes crypto-related technologies can be invaluable to structured financial systems.

The risks

Huang drew attention to the risks connected to Bitcoin and other crypto albeit encouraging an in-depth analysis of the assets’ long-term benefits for the country. He argued that Bitcoin does not have intrinsic value, which makes it less like a currency and more similar to a digital asset. He added that a lot of Bitcoin transactions are related to unlawful activity.

Privately issued stablecoins are “worth considering”

Huang admitted that the digital yuan, China’s central bank virtual currency, hasn’t become popular in the years since it was introduced. According to him, it might not be reasonable to let private institutions issue stablecoins based on the virtual currency, but one should consider the pros and cons of this.

Contradictory stance on crypto

In 2019 Xi Jinping, President of the People's Republic of China, encouraged the government to speed up blockchain adoption to enable innovation. Later, the government showed hostility to crypto. It prohibited practically all transactions involving it just two years later.

Was crypto trading ever really banned?

In early 2022, China was the second-biggest Bitcoin mining source worldwide despite the ban. Apparently, the country still has a sizable crypto community. Official data showed that customers in mainland China made up 8% of failed crypto exchange FTX in spite of the fact that the government outlawed crypto.

Some members of the lively crypto community are convinced the government never really banned people from trading or holding crypto.

Contributors

Daniela Kirova
Writer
Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.