China’s central bank worried about stablecoins’ risk to financial systems

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The Chinese central bank is “quite concerned” about the global financial risks associated with digital currencies, especially stablecoins, according to a senior official.

Fan Yifei, deputy governor of the People’s Bank of China (PBoC), expressed concerns about the allegedly serious threatening stablecoins like Tether (USDT) to global financial and settlement systems, CNBC. reported Thursday.

The official stressed that the speed of development in private payment systems is “very alarming”, and PBoC is working against monopolies and the “disorderly expansion of capital”, adding:

“The so-called stablecoins of some business organizations, especially global stablecoins, can bring risks and challenges to the international monetary system, and payment system.”

Fan noted that the Chinese government has already taken some measures to limit the expansion of global stablecoins in the country. The lieutenant governor stressed that the PBoC will apply the same restrictive measures it took against Alibaba’s Ant Group to other entities in the payment services market.

As previously reported, the Chinese state halted Ant’s $ 37 billion investment last November, also launching an anti-trust investigation into Alibaba. Mu Changchun, head of digital currency research at the PBoC, later said China’s central bank’s digital currency is designed to provide backup for major retail payment services like AliPay and WeChat Pay as its main target. According to Fan, China’s invitation-only digital yuan system has accumulated more than 10 million users so far.

In addition to warning against stablecoins, Fan also criticized major cryptocurrencies such as Bitcoin (BTC), stating that such digital currencies “have become speculative tools” and pose potential threats to “financial security and social stability.”

Related: Stablecoins under investigation: USDT stands at “trading paper”

China has taken a strong stance on the cryptocurrency industry, recently renewing its crackdown on cryptocurrency mining activity and also on cryptocurrency.

Meanwhile, some of the world’s largest payment companies like Visa have doubled their positive stance on stablecoins. “Stablecoins is on track to become an important part of the broader digital transformation of financial services, and Visa is excited to help shape and support that development,” the company wrote in its official crypto update on Wednesday.