Central Bank of China voices concerns on risks of stablecoins

In a report by Consumer News and Business Channel (CNBC) last July 8, the Deputy Governor of the People’s Bank of China (PBoC), Fan Yifei, expressed his concerns on stablecoins like Tether (USDT) which could pose as a threat to global financial and settlement systems.

In his statement to CNBC translated from Mandarin to English, he said, ‘Some commercial organizations or so-called stablecoins can bring risks and challenges to the international monetary and payment systems.’

Fan highlighted that the development in private payments systems is alarming but PBoC is taking measures to fight against monopolies and the ‘disorderly expansion of capital’. He also mentioned that they limited the spread of global stablecoins in the country in the same way they did to Alibaba’s Ant Group and other entities in the payment services industry.

According to local media organization China Global Television Network (CGTN), Fan gave his cautious stance about digital currencies like Bitcoin (BTC) and stablecoins during the media conference in Beijing last July 8. He stated that ‘these currencies are speculative tools, bringing potential risks to financial security and social stability’, further saying that these coins have also become devices for ‘money laundering and illegal economic activities’.

Last July 6, PBoC shut down local-based software maker Beijing Qudao Cultural Development Co. Ltd. for its alleged involvement in cryptocurrency trading. In a joint statement released by Beijing financial supervision administration and PBoC, they ordered the suspension of Qudao’s operations and the deactivation of their website to control the crypto trading speculation in the country and protect the safety of their people’s property.

On the other hand, the head of the digital currency research at PBoC, Mu Changchun emphasized that their version of digital currency is a backup for major retail payment services such as AliPay and WeChat Pay, read in CoinTelegraph’s report. Additionally, Fan shared that this invitation-only digital yuan system has over 10 million users as of writing.

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