Crypto adoption is a ‘huge challenge,’ says Chinese central bank exec

The rapid adoption of cryptocurrencies like Bitcoin poses a major challenge for the traditional financial, warned the Chinese central bank an executive.

Crypto adoption is a ‘huge challenge,’ says Chinese central bank exec

The director of the payment and settlement department at the People’s Bank of China (PBoC), Wen Xinxiang has expressed concerns over the growing popularity of cryptocurrencies and fiat-pegged stablecoins.

The Shanghai Securities Journal reports, pointing to Bitcoin’s market value, which is now surpassing $800 billion and the total stablecoin market capitalization exceeding $120 billion, Wen outlined major risks associated with the crypto market at a payment and settlement forum on Friday.

According to the banker, one of the main challenges of crypto is that the industry is capable of operating separately from the traditional payment system supported by commercial banks and payment institutions. Cryptocurrencies also cause issues for the payments services by banks, weakening the power of clearing organizations, Wen reportedly noted.

Wen also argued that the alleged anonymity of cryptocurrencies makes it an attractive tool for facilitating illegal transactions such as money laundering, urging for more measures for the traditional financial system to compete with crypto:

“The challenge of virtual currency is huge. When the traditional financial system responds to the competition in the financial industry from big tech companies, it can also rely on traditional methods such as law and supervision to increase anti-monopoly efforts and strengthen personal privacy and information protection.”

Wen’s remarks further reaffirm the anti-crypto stance of the Chinese government as China has continued to crack down on crypto trading and mining this year, with local authorities shutting down multiple mining farms and suspending crypto trading transactions.

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