- Wen Xinxiang a PBOC director gives reasons crypto adoption is a problem for China.
- Mr.Wen says cryptos are a threat to traditional finance and banks.
An executive of the People’s Bank of China (PBOC), Wen Xinxiang, has explained why crypto adoption is a problem for the Asian country.
Mr Wen is the director of payment and settlement at the PBOC, expressed concerns over the growing popularity of cryptocurrencies and fiat-pegged stablecoins.
While speaking at a forum on Friday, the PBOC director highlighted several reasons crypto adoption is a problem for China. He pointed at the market value of Bitcoin at $800 billion and the total stablecoin market capitalization exceeding $120 billion.
With this, he noted that the major risk outlined with the crypto market is the fact that the industry is capable of operating separately from the traditional payment system supported by commercial banks and payment institutions.
Other reasons Crypto adoption is a threat for China
Mr Wen noted that crypto adoption is an issue for payment services offered by banks as they weaken the power of clearing organizations.
The PBOC director also argued that the anonymity of cryptocurrencies makes it an attractive tool for facilitating illegal transactions such as money laundering.
He called for the improvement of the traditional financial system to enable it to compete with cryptocurrencies.
Wen noted that the digital asset world faces a lot of challenges. Hence, the traditional finance system should outpace it such that cryptos eventually need to rely on traditional finance for survival.
Wen comments, reflection of China crypto stance
His comments are a reflection of what is happening in China with the crypto industry as the government there has intensified effort to crackdown on cryptocurrency trading and mining.
Local Chinese authorities have been shutting down multiple mining farms and suspending crypto trading transactions.
Back in July, the PBOC was particularly about Stablecoin growth as he said the doors of development of the private attention system was alarming.