China is Missing Fintech Opportunities Banning Crypto, Warns Economist

China should reconsider its adverse and rigid stance on crypto activities, the economist has alerted.

Written by Radhika Parashar, Edited by Richa Sharma | Updated: 2 February 2023 18:38 IST

China is Missing Fintech Opportunities Banning Crypto, Warns Economist

Photo Credit: Unsplash/ Ezreal Zhang

China banned all crypto-related activities in September 2021

Highlights

Chinese government is concerned of crypto misuse
China is looking to explore blockchain
China is busting illegal crypto mining operations

China, while accelerating its efforts to test and launch its CBDC, is still maintaining a blanket ban on all crypto-related activities. Huang Yiping, the former advisor to the People's Bank of China (PBOC), has voiced concerns that China is losing next-gen fintech opportunities that other parts of the world are already experimenting with. Yiping's warning to the Chinese authorities comes in the backdrop of its neighbour India, taking a comparatively friendlier approach towards crypto.

China should reconsider its adverse and rigid stance on crypto activities, the economist reportedly alerted.

In Yiping's opinion, opportunities in exploring the ‘very valuable' blockchain technology are enormous.

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Concerned about the misuse of cryptocurrencies for illicit purposes, Beijing imposed a blanket ban on activities in the sector. Crypto transactions are largely untraceable, and the scope of cryptocurrencies being used for money laundering, tax evasion, and terror funding have stirred concerns for governments around the world for some years now.

The constant need for energy to facilitate crypto mining was also hindering the smooth supply of power to many parts of the nation.

Last year, China announced that nationals who engage in fundraising activities via cryptocurrencies will be subjected to jail time.

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Unlike China, other countries like India, the US, the UK, El Salvador, and Russia are keeping a gradual but accepting pace towards the virtual digital assets space.

The country is, however, not closed to the idea of experimenting with blockchain.

China's e-CNY CBDC is already under test runs in select cities.

In August last year, China's Taiyi Group acquired Huobi's ‘Huoxun' communication tool in order to add more technical details in its metaverse exploration journey.

This January, China also welcomed an official, state-backed NFT marketplace that would let Chinese NFT traders to dabble in the space, but under the oversight of China's government.

The law enforcement authorities in China have been raiding and busting illegal crypto operations that are going on despite the government's ban.

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Further reading: Cryptocurrency, China, Crypto Ban, Blockchain

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More