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Besides asking the People’s Bank of China to rescind its crypto ban decision, Huang also shared his insights on what the apex financial regulator needs to do to boost the relevance of the digital yuan.
Close to two years into the nationwide ban on crypto-related transactions, a former executive of the People’s Bank of China (PBoC), Huang Yiping has asked the apex bank to revise its stance. As reported by Cointelegraph, Huang said the ban on the nascent asset class was necessary and advised in the short term, however, the crypto ban may not be strategic in the foreseeable future.
Huang served as a member of the Monetary Policy Committee (MPC) of the PBoC placing him high in the ranking in top decisions that bordered on the financial ecosystem. To Huang, banning crypto permanently may not be sustainable in the long run. He argued that such a move may prevent the world’s second-largest economy from catching on with evolutionary trends in the world of finance.
Among the opportunities Huang believes China will miss out on should it remain adamant in its crypto ban stance includes those related to blockchain and tokenization.
“Banning cryptocurrencies may be practical in the short term, but whether it is sustainable in the long run deserves an in-depth analysis,” Huang stated.
While Huang is an advocate of rescinding the ban approach on digital currencies, He also expressed the need to float a functional regulatory framework for the nascent asset class. Considering the current disposition of the Xi Jinping-led regime, he believes achieving this comprehensive crypto-regulatory goal will be a herculean task.
“There is no particularly good way to ensure stability and function as to how cryptocurrencies should be regulated, especially for a developing country, but ultimately an effective approach may still need to be found,” he said.
Following his service at the PBoC, Huang now works as a Professor of Economics at Peking University, giving him a more authoritative stance on the opportunities China could miss if it remains hawkish about crypto.
Beyond Crypto Ban: Further Advice for PBoC
Besides asking the People’s Bank of China to rescind its crypto ban decision, Huang also shared his insights on what the apex financial regulator needs to do to boost the relevance of its Central Bank Digital Currency (CBDC) dubbed the digital yuan.
According to Huang, the digital yuan has not received a widespread embrace since it was first introduced for some time now. He believes analyzing the pros and cons of permitting private players to issue stablecoins based on the digital yuan should be considered. While he acknowledged this remains a polarized subject, he believes such a move can change the perception and adoption of digital legal tender.
China might have banned crypto and mining activities, but the government still presents itself as a major proponent of blockchain technology which underpins these digital assets. In the heat of the coronavirus pandemic, China registered more than 10,000 new blockchain-based companies, a milestone the country hopes to maintain to help revolutionize its broader digital ecosystem.