Huang Yiping, a former official at the People's Bank of China (PBoC), has encouraged the country's central bank to reconsider its position on the statewide prohibition on crypto-related transactions. The restriction has been in place for close to two years.
According to reports (1), Huang stated that the ban on the emerging asset class was required and advisable in the short term; however, the prohibition of crypto currencies may only be effective for a while.
As a result of Huang's service on the Monetary Policy Committee (MPC) of the People's Bank of China (PBoC), he had a prominent position in the ranking for the most critical choices that touched on the financial ecosystem.
According to Huang, an outright ban on crypto currencies may not be viable in the long term. He argued that such a move would make it more difficult for the world's second-largest economy to keep up with the ever-evolving trends in the world of finance.
Suppose China continues to be steadfast in its position that crypto currencies should be banned. In that case, Huang feels that the country will forego several possibilities, including those relating to blockchain technology and tokenization.
According to Huang, "Banning crypto currencies may be feasible in the short term, but the question of whether or not it is viable in the long run demands an in-depth investigation."
While Huang is a proponent of repealing the ban strategy on digital currencies, he has also conveyed the desire to float a usable set of regulations for the emerging asset class. He feels that it will be a Herculean challenge to achieve this all-encompassing crypto-regulatory aim, given the current state of the government governed by Xi Jinping.
"There is no particularly excellent method to assure stability and functionality as to how crypto should be controlled, particularly for a developing nation, but eventually, an effective strategy may still need to be discovered," he added. "But ultimately, an effective solution may still need to be found."
As a result of his time spent working for the PBoC, Huang is now a professor of economics at Peking University. This gives him a more authoritative perspective on the prospects that China may miss out on if it continues to be cautious regarding crypto currencies.
Some More Suggestions for the PBoC
In addition to requesting that the People's Bank of China reverse its decision to ban crypto currencies, Huang also shared his insights regarding what the top financial regulator in China needs to do to increase the significance of its Central Bank Digital Currency (CBDC), which is also known as the digital yuan.
According to Huang, the digital yuan has yet to be widely adopted since it was initially presented quite some time ago, even though it has been available for quite some time.
According to him, it is crucial to examine the benefits and drawbacks of allowing private parties to produce stablecoins centered on the digital yuan before moving forward with the idea.
Even though he admitted that this is still a contentious issue, he believes such a move can alter how people view the digital legal tender and increase its use.
Even though China has outlawed crypto currency and mining operations, the Chinese government continues to portray itself as a significant supporter of blockchain technology, which is the technology that supports digital assets.
During the height of the coronavirus outbreak, China incorporated more than 10,000 new blockchain-based enterprises. This is a milestone that China intends to achieve and sustain to assist in altering its larger digital ecosystem.