Fan Yifei – Deputy Governor of the People’s Bank of China (PBoC) – has expressed concern that digital currencies, especially stablecoins, could negatively affect the global financial system. China’s central bank fears a global expansion of private cryptocurrencies. He further described the assets as “speculative instruments”.
According to PBoC, stablecoins pose a risk to the international financial system
In a recent interview, former chairman of the Bank of Shanghai and current deputy governor of the People’s Bank of China – Fan Yifei – said that stablecoins could damage global financial stability and the current payment system:
“Some commercial organizations, the so-called stablecoins, especially global stablecoins, can pose risks and problems for the international financial system, the payment and settlement system, etc. ”
The banker added that the Chinese central bank was “very concerned” about this problem and claimed that the institution had taken action in this direction. Yifei continued his comments, calling these digital currencies “speculative tools” that have the potential to jeopardize financial and social security.
Unlike the decentralized nature of cryptocurrencies, the PBoC is developing a digital version of the Chinese yuan that is fully controlled by the central bank. In early June, authorities even distributed a significant $ 6.2 million CBDC to Beijing residents in an effort to expand their project.
The deputy governor of the PBoC added that his work now mainly includes the digital currency of the central bank. He said the invite-only digital yuan distribution system has seen massive growth with more than 10 million users.
Is China only interested in its CBDC?
The world’s most populous country is well known for its hostile approach to the cryptocurrency industry, and has recently intensified its actions by following BTC. While local authorities have argued that this was a direct consequence of environmental problems, there may be another reason behind the ban on cryptocurrency.
Christopher Wood, a financial analyst and global head of capital strategy at Jefferies, said the Asian superpower had recently intervened against BTC and other cryptocurrencies, just to make way for its own digital yuan.
In addition, she believes that China really doesn’t care about CO2 emissions and the environment, as she said before. The aim of all authorities is to neutralize competition for the incoming CBDC:
“The decentralized aspects of blockchain technology, which is so appealing to libertarians who oppose fiat currencies as state monopolies, are certainly the complete opposite of the Chinese collectivist system. This is certainly a much more important issue for Beijing than the carbon-releasing aspects of BTC mining. “