The Institute of International Finance, a part of The People’s Bank of China (PBOC), gave out another news related to the country’s cryptocurrency policy on its “Global Banking Industry Outlook Report” released this week.
It states that the central bank and government are already deeply invested in blockchain technology, but it may well expand R&D further, especially as China plans to launch its own national cryptocurrency. The document claims that widespread retail investment into cryptocurrencies has the potential to pose systemic risk to the Yuan, and also emphasizes the PBOC’s intention to expand its research and development into cryptocurrencies.
The reported risks are the ones such as a risk for financial stability, anonymity as an encouragement for money laundering, and lack of security against hacking, just to name a few.
The document highly supports the strengthening of China’s regulatory framework regarding cryptocurrencies, calling for the development of a comprehensive procedure for monitoring the circulation of virtual currencies.
The report also supports propositions that the G20 should lead efforts to establish a global regulatory framework with regards to digital currencies, advocating information sharing and cooperation between international regulatory institutions regarding digital currencies.
While China recognizes the value of blockchain and cryptocurrencies despite the criminal use and lack of customer and investor protection, the country is worried by the threat over the Yuan. To tackle this, the PBoC aims to develop its own digital currency and control the unofficial ones.
The document by PBOC emphasizes PBOC’s desire to expand its efforts asserts in the “promoting the R&D of the central bank’s digital currency” as a primary monetary policy for 2018, indicating that the development of a long-rumored Chinese national cryptocurrency is still a top priority for China’s central bank.
With these regulations coming into play, its hard to assert whether cryptocurrency is going to stay long in the Chinese market.
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