Former Chinese finance minister Lou Jiwei urged China to closely monitor cryptocurrency advancements at the 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing, according to a recent report by Josh O’Sullivan for Cointelegraph.
In his speech, Lou, as reported by Sina Finance, emphasized that digital assets could pose significant dangers to financial stability. He expressed apprehension regarding the volatility of cryptocurrencies and their potential involvement in illicit activities, such as money laundering, which might compromise economic security.
Lou also observed the evolving stance of the United States towards digital currencies, particularly in the wake of the U.S. Securities and Exchange Commission (SEC)’s approval of spot Bitcoin exchange-traded funds (ETFs) in January. He urged Chinese policymakers to critically consider these global developments, as they could have substantial repercussions for the financial markets.
Lou emphasized that digital currencies have been perceived as a threat to financial stability for a long time, with concerns such as anti-terrorism financing and Anti-Money Laundering (AML) being significant. In order to safeguard financial systems from potential disruptions, he underscored the necessity of conducting a comprehensive examination of these threats.
Lou’s remarks also addressed China’s prohibition of Bitcoin (BTC) mining and trading in 2021. Although CryptoQuant CEO Ki Young Ju emphasized that this dominance is changing, China continues to account for over 55% of the global Bitcoin hash rate, despite this prohibition. About 40% of global BTC mining activities are currently under the authority of U.S.-based mining operations, indicating a progressive shift in the balance of power.
Lou concluded by highlighting the necessity for China to remain cognizant of the digital economy’s innovations and risks. He suggested that in order to guarantee financial stability and long-term development, China should remain informed and prepared to respond to global changes in cryptocurrency policies.
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