At the 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing, former Chinese finance minister Lou Jiwei called on China to keep a close watch on cryptocurrency advancements, according to a recent report by Josh O’Sullivan for Cointelegraph. In his speech, as reported by Sina Finance, Lou pointed out that digital assets could pose serious risks to financial stability. He raised concerns about the volatility of cryptocurrencies and their potential involvement in illegal activities, including money laundering, which could threaten economic security.
Lou also noted the changing attitude in the United States toward digital currencies, especially after the approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) in January. He urged Chinese policymakers to take these global developments seriously, as they could have significant consequences for the financial markets.
During his address, Lou stressed that digital currencies have long been viewed as a risk to financial stability, with issues like anti-terrorism financing and Anti-Money Laundering (AML) being major concerns. He emphasized that these threats need to be thoroughly examined to protect financial systems from potential disruptions.
Lou’s comments also reflected on China’s 2021 ban on Bitcoin (BTC) mining and trading. Despite this prohibition, China still accounts for over 55% of the global Bitcoin hash rate, although CryptoQuant CEO Ki Young Ju highlighted that this dominance is shifting. U.S.-based mining operations now control about 40% of global BTC mining activities, signaling a gradual change in the balance of power.
Lou concluded by emphasizing the need for China to stay aware of both the risks and innovations within the digital economy. He advised that China should remain informed and prepared to respond to global shifts in cryptocurrency policies to ensure financial stability and long-term development.
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