Why does China Central Bank fears Stablecoin?
It was bound to happen. After Bitcoin Mining Ban and general crackdown of cryptocurrencies in China, The People’s Bank of China has expressed concern over the risk of Stablecoins.
Bank of China states that Bitcoin and Stablecoins have become speculative tools that threaten financial security and social stability. Their main concern is that these “tools” can become more useful for money laundering and illegal economic activities.
Just In: The deputy governor of the central Bank of China stated that Bitcoin and stablecoins have become speculative tools with potential risks that threaten financial security and social stability, also become payment tools for money laundering and illegal economic activities. pic.twitter.com/ad040lYDd2
— Wu Blockchain (@WuBlockchain) July 8, 2021
In other words, China doesn’t like anything that they cannot control. China’s decision can also be connected with another project that China is working on since 2014. Its own CBDC issued digital yuan. Bitcoin represents a different approach to what China wants to offer with its DCEP. I wrote a separate article that delves into this subject.
It’s still unclear what measures China will take to fight Stablecoins. If there will be any development in the situation, I will update you on the matter.
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