Recently, the (China Financial Stability Report (2024)) released by the central bank reveals a new perspective on cryptocurrencies.
The central bank's attitude towards cryptocurrencies has shown a significant shift. In the past, the central bank was more concerned about the financial risks posed by cryptocurrencies, but now it is more focused on market recovery and global trends. This adjustment in attitude is based on the rapid development of cryptocurrencies globally. Since 2022, the scale of cryptocurrency business in overseas markets has continued to grow, with models expanding to include traditional cryptocurrencies, stablecoins, and decentralized finance (DeFi) areas.
The (China Financial Stability Report (2024)) released by the central bank shows a clear shift in attitude towards cryptocurrencies. In summary:
- Shift in attitude: From last year's concerns about the financial risks posed by cryptocurrencies to this year's greater focus on market recovery and global trends.
- Focus on Hong Kong's practices: The exploration results in the Hong Kong cryptocurrency sector are detailed for the first time, with the dual licensing regulatory system categorizing virtual asset trading platforms into securities and non-securities and regulating them according to their characteristics.
- Focus on stablecoins: Attention to stablecoins linked to traditional fiat currencies, with research on them reflecting responses to global market changes and China's exploration in the cryptocurrency sector.
The report provides a detailed explanation of the exploration and innovative achievements of cryptocurrency regulation practices in Hong Kong. As an indispensable part of China's financial system, Hong Kong's dual licensing regulatory system is unique. This system accurately classifies virtual asset trading platforms into securities and non-securities categories, and regulates them under legal frameworks that fit their characteristics. In addition, Hong Kong requires large financial institutions such as HSBC and Standard Chartered Bank to include cryptocurrency exchanges in their regular customer supervision, laying a foundation for the standardized development of the cryptocurrency market and becoming a focus of attention for many experts and scholars.
Stablecoins are also a key focus mentioned in the report. Linked to traditional fiat currencies, stablecoins possess a degree of stability and have enormous potential in areas such as cross-border payments and financial market liquidity, making them a testing ground for many countries' financial policies. The central bank's attention and ongoing research on stablecoins not only respond to changes in the global market but also reflect China's gradual involvement and exploration in the cryptocurrency field.
From a global perspective, regulatory authorities in various countries are continuously strengthening their regulatory efforts on cryptocurrency assets. Currently, 51 countries and regions have introduced prohibitive regulations, while major economies such as the United States, the European Union, and Singapore are establishing comprehensive regulatory frameworks by adjusting existing laws or re-legislating. For instance, the (Regulation of the Crypto Asset Market) in the EU, as the world's first complete and clear regulatory framework, has officially come into effect at the end of 2024, which will undoubtedly have far-reaching impacts on the global cryptocurrency market.