Huang Yi-ping, a professor of economics at Peking University and a former member of the monetary policy committee of the People’s Bank of China, stated that China may need to change its stance on cryptocurrencies in order not to fall behind and lose the race. advancements in digital assets.
Huang believes that cryptocurrencies are more like digital assets than digital currencies and that China’s current ban on cryptocurrency transactions may be beneficial in the short term, but that new digital technologies such as tokenization have important application value for the financial system and not may be lost. .
In his article published on the social network Weixin, the professor from Peking University pointed out that China’s ban on cryptocurrencies may not be effective in the long run.
He argues that China needs to carefully consider its approach to cryptocurrencies as it risks missing out on major technological developments in digital assets. In addition, he believes it is important for the country to develop a more comprehensive, secure and standardized direction for its digital currency.
China’s digital currency
Huang said the benefits and costs of China’s central bank digital currency depend on the specific design of the system. He believes that when designing a digital currency, several dimensions should be taken into account, such as protecting privacy and neutralizing financial risks.
The digital renminbi, or China’s digital yuan, can be a benchmark for central bank digital currency design and issuance. It also emphasizes the importance of data governance and the need to avoid storing data in “islands”.
However, Huang said that cryptocurrencies like Bitcoin are more like digital assets than currencies due to their lack of intrinsic value. Therefore, he emphasizes the importance of considering the risks of cryptocurrencies when evaluating their use.
China and cryptocurrency
This is evident from a study by live coinsChina has fought to keep the Yuan as the country’s sole currency, depriving its citizens of any freedom of choice.
The speech is the same in all prohibitions: to protect the country’s economy and take care of social security.
For example, China has banned bitcoin and cryptocurrencies at least 9 times since 2009, with the first ban being triggered by online games, whose credits as well as in-game items were traded with the local currency, the yuan.
In 2017, the Chinese government again put pressure on the national market, requiring exchanges to comply with strict rules, similar to those of the forex market, in order to continue to function.
As early as 2021, the Chinese government began a series of bans, starting with financial institutions and payment companies. Determining that they could not perform any activity involving Bitcoin or other cryptocurrencies.
Still in 2021, China found a way to curb Bitcoin adoption in its country, this time by banning cryptocurrency mining.
China wants to tax cryptocurrencies
Despite having banned bitcoin several times, China appears to be planning to change its stance in 2023, as a story by Chinese journalist Colin Wu revealed that China’s recent cryptocurrency tax model is a “clear indication that the Chinese government sees cryptocurrencies as a legitimate form of wealth”.
“China has taken a big step towards cryptocurrency regulation with the implementation of a cryptocurrency transaction tax,” Wu said.
“This signals the growing adoption of cryptocurrencies across the country”wrote Justin Sun, founder of Tron on this topic. “With the increased use of cryptocurrencies in China, the government is expected to further regulate the industry, bringing more legitimacy and stability.”
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
