Stablecoins News: The vice president of the People’s Bank of China cast a shadow over the use of stablecoins in the crypto market in his latest speech. China also calls stablecoins money laundering tools.
Fan Yifei, Vice President of the People’s Bank of China, spoke about the speculative nature of both Bitcoin and stablecoins at the State Council policy briefing this morning. He said that Bitcoin and stablecoins are a potential threat to the financial security and social stability of the state, as the decentralized digital currency has become a gateway to money laundering and illegal economic activity.
Fan Yifei touched on the disadvantages and security dangers of so-called ‘safe’ stablecoins. He said he sees stablecoins as representatives of private currencies that support the consistency of uncertain and insecure financing.
“So-called ‘stable coins’ of some business entities, especially global ‘stable coins’, international monetary system, payment and settlement system etc. It can bring risks and challenges for
Promoting the Central Bank’s digital currency
Fan Yifei encouraged people to make an absolute transition to a central bank digital currency. He shared that the People’s Bank of China has seen a unanimous and successful response to its central bank currency. Central bank currency is mainly issued to corporate entities such as commercial banks and is mostly used for large-value payments. Yifei said the following words:
“Right now, all sectors of society have basically formed a consensus on the impact of the central bank digital currency. Most studies believe that the central bank digital currency will not have an impact on the current financial system.”
While the central bank-issued digital yuan is performing well, the retail currency still has a long way to go before reaching a positive consensus. Fan Yifei talked about the economic efficiency of the retail digital currency and various discussions on whether an IPO would be an ideal choice for day-to-day transactions.
“The debate over whether a retail central bank digital currency will cause financial intermediation and weaken monetary policy and boost bank operations is more intense. We are also very concerned about these issues. We are currently in the piloting phase. We always pay close attention to the impact of this digital currency on the monetary system, monetary policy and financial stability.”
Amid historic cryptocurrency crackdown in China, the expanded attack on stablecoins and the introduction of the central bank’s digital currency could be seen as activating the final phase of crackdown before China launches its own CBDC for the public.