Huang Yiping, a former monetary policy committee member of the People’s Bank of China (PBoC), has expressed concerns that China is missing out on financial development opportunities following the country’s ban on Crypto currencies.
Former PBOC Member Says Crypto Currency Adoption Is Linked to Development Opportunities
While the PBOC has reasons to ban virtual currency activities, Yiping noted that the central bank should consider long-term interests and dig deeper to achieve a sustainable, viable strategy.
In his assessment, banning cryptocurrency-related activities is feasible in the short term. By banning Crypto currencies, it risks depriving people of important development opportunities.
He acknowledged that Crypto currencies bring new digital technologies. Yiping responded to his stance on the adoption of virtual currencies, saying they are still valuable to the formal financial system.
Despite allowing citizens to hold digital assets, China has a frosty relationship with cryptocurrencies. According to Chinese journalist Colin Wu, in addition to auditing crypto “whale” investors, the country also imposes a 20% tax on certain investors’ crypto trading and mining profits.
The current crypto taxation framework is not fully defined due to the ban. Therefore, the mixed regulatory stance may indicate that the country needs to legalize Crypto currencies.
What is the Reason Behind China’s Crypto Currency Ban?
In late September 2021, China banned Crypto currency trading and restricted its population from using it. The People’s Bank of China cited several reasons, including linking virtual currencies to money laundering activities, RMB depreciation, and capital flight.
Although the ban had an impact on the Crypto currency market, it made the USA a world leader in Crypto currency mining.
Recent reports have stated that there is a debate about integrating China’s financial system and the crypto economy. State officials have been studying and deliberating on the matter, particularly tax measures.
