Explore China’s potential reconsideration of cryptocurrency prohibition as values rise and usage increases. Former PBoC member Huang Yiping highlights the need for reevaluation to enhance global fintech competitiveness.
Authorities in China have started to consider eliminating the country’s prohibition on cryptocurrencies as cryptocurrencies appear to be on the road to recovery, with values rising and everyday indicators that usage is on the rise. This would allow cryptocurrencies to remain competitive in the global economic environment. Former PBoC Monetary Policy Committee member Huang Yiping recently expressed his concerns about the state of fintech in China and suggested that the government reconsider its stance on the viability of a long-term ban on cryptocurrency trading.
Huang expressed his worries in a speech in December, according to a story from the South China Morning Post. He claimed that a permanent ban on cryptocurrencies would result in several lost opportunities for the nation’s financial system, particularly those connected to blockchain and tokenization.
Huang acknowledges the practicality of banning cryptocurrencies in the short term, but questions its long-term sustainability. Ensuring stability and functionality in controlling cryptocurrencies, particularly for developing nations, poses challenges. Huang, an economics professor at Peking University, suggests exploring the option of private institutions producing e-CNY-backed stablecoins to accelerate the adoption of China’s digital yuan. However, he recognizes the sensitivity surrounding this topic.
Huang acknowledged the various risks involved with cryptocurrencies like Bitcoin, which he said lack intrinsic value and saw a high percentage of transactions tied to unlawful activities, and addressed these concerns as true. China has long taken the position of “blockchain, not Bitcoin,” and Huang addressed these issues as well.
According to Chainalysis, whose data “suggests that the ban has either been ineffective or loosely enforced,” China has once again risen to become the second-largest Bitcoin miner in the world and still ranks in the top 10 on the Global Crypto Adoption Index.
Suzhou wants to become a hub for the metaverse
The 12 million-person-strong Chinese city of Suzhou, situated in the Jiangsu Province, has unveiled a strategy to position itself as a center for metaverse innovation and development. Suzhou hopes to accomplish this aim by 2025 by luring at least 200 businesses specializing in the development of virtual reality technologies to locate there. By 2025, the value of the metaverse-related industry is predicted to reach 200 billion yuan (US$29.77 billion).
The 30 economic areas targeted by the metaverse program include tourism, education, healthcare, and local government. The plan’s budget has not yet been made public.
Shanghai, the hub of China’s financial industry, has also announced intentions to advance the metaverse sector, including the December establishment of its first industrial fund with a 1 billion yuan (US$149 million) fundraising target. Beijing, Guangzhou, Chongqing, Jinan, the provinces of Zhejiang and Henan, and other cities that have taken a similar path and publicized plans for metaverse development are Beijing, Guangzhou, Chongqing, and Jinan.