China may comply with global cryptocurrency regulations, central bank report suggests

China’s central bank states that the country is willing to support the global cryptocurrency regulatory framework established by the G20.

The Central Bank of China supports a global regulatory framework

The Institute of International Finance, part of the People’s Bank of China (PBOC), provided new insight into the country’s cryptocurrency policy in its “Report on Global Banking Sector Prospects” released this week. The central bank and government are already deeply invested in blockchain technology, but may expand their research and development efforts even further, especially as they plan to launch their own national cryptocurrency.

According to the report, the PBoC maintains its view that massaging cryptocurrencies as retail investments could pose systemic risks to CNY, but the Institute of International Finance advocates the establishment of a global regulatory framework. Supporting global cryptocurrency regulation means that China is willing to eventually legalize the trade and use of cryptocurrencies.

The potential for extreme price fluctuations as a threat to financial stability, anonymity as an incentive for money laundering, and a lack of security against hacking are just some of the arguments against cryptocurrencies presented in the report.

The document shows that lThe lack of effective coordination between countries leads to a regulatory vacuum. Therefore, the institution proposes strengthening regulatory supervision, cooperation and coordination. In early 2018, the finance ministers of Germany and France called for a global regulatory framework for digital currencies. It was proposed by the FSC, South Korea’s financial regulator cooperate with China and Japan.

According to the report, China’s central bank expects various governments to improve their supervision of digital currencies and increase the use of cryptocurrencies as a means of exchange and payment. “China should actively participate in the global governance of digital currencies” to influence the formulation Regulatory rules for digital currencies.

While China recognizes the value of blockchain and cryptocurrencies despite criminal use and a lack of protection for customers and investors, the country is concerned about the threat from the yuan. To combat this, the PBoC intends to develop its own digital currency and control unofficial currencies.

The Asian superpower remains the leading country in cryptocurrency mining as the government cracks down on the activity, as well as initial coin offerings (ICOs), exchanges, chat rooms and digital trading sites. Opening up to the global regulatory framework established by the world’s twenty most powerful countries is a strategic move aimed at exerting influence, but it also represents new hope for cryptocurrency traders and users in China.

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