China's Former Finance Minister Urges Caution on Cryptocurrency Development
At the recent 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing, Lou Jiwei-former finance minister of China calls for caution to be taken regarding cryptocurrency development. Lou pinpointed the possible dangers that digital currencies offer toward financial stability. The former finance minister is concerned about their high volatility and the use of digital currencies in illegal activities.
This speech was given at a time when the landscape of cryptocurrencies is rapidly changing around the world. He alluded to the evolving attitude of the United States toward digital assets, especially after the recent approval of the U.S. Securities and Exchange Commission for spot Bitcoin and Ethereum exchange-traded funds. According to Lou, this policy shift will require close attention from Chinese policy thinkers.
The ex-minister did not mince words and called out the possible adverse impact of cryptocurrencies on the world markets. He underlined that volatility in crypto markets could bring immense financial fragility.
Lou also mentioned the more traditional concerns, instrumentalization of digital means for money laundering and financing terrorism, underlining that all of those risks should be thought over with great care to protect financial systems against possible upsets.
"We should study the international change and policy adjustment because it is a very important topic for the development of the digital economy," Lou emphasized, adding that the risks and innovations around cryptocurrencies should be figured out.
Despite China's blanket ban in 2021 on the mining and trading of Bitcoin, the country still holds strong in the mining landscape of the cryptocurrency. Recent data shows that through mining pools, China controls more than 55% of the Bitcoin mining network, though this seems to gradually shift to the United States.
