Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
Regulators Should Consider Crypto Risks When Innovating Regulation, China Central Bank Says – Regulation Bitcoin News
A senior official of the People’s Bank of China (PBOC) has urged regulators to consider cryptocurrency risks and fraud that could lead to bank failure when innovating regulation. The Chinese official highlighted the recent collapse of US banks that provided services to crypto customers as an example. “The regulatory philosophy, technology and capacity must be upgraded to ensure that financial innovation does not come at the expense of financial stability,” he stressed.
Chinese central banker on crypto risk and bank failure
Xuan Changneng, a deputy governor of the People’s Bank of China (PBOC), China’s central bank, spoke at the Boao Forum on Friday about the potential dangers of financial innovations, including cryptocurrencies, that could cause banks and lenders to fail. He was quoted by Bloomberg as saying:
Risks and fraud related to cryptocurrency, including the two US banks that ran into trouble after providing many services for cryptocurrency from taking deposits to settlements, showed that regulators should respect rules when innovating regulation.
Although the Chinese central bank official did not name specific banks, two crypto-friendly banks in the US – Signature Bank and Silvergate Bank – recently failed. Signature Bank was seized by the New York State Department of Financial Services while Silvergate Bank underwent voluntary liquidation.
While stating that there must be sufficient room for innovation, the PBOC deputy chairman emphasized that regulators must “verify and confirm the new technologies applicable to various financial models and products, rather than simply accepting or approving them.”
Furthermore, the central bank official emphasized:
The regulatory philosophy, technology and capacity must be upgraded to ensure that financial innovation does not come at the expense of financial stability.
At the same forum on Friday, China’s Vice Minister of Finance and Deputy Director of the Office of the Central Financial and Economic Affairs Commission, Liao Min, underlined the importance of the Chinese government’s active participation in international cooperation and coordination of standards. He stated that China must become “deeply” involved.
What do you think of the statements made by the Chinese central bank official? Let us know in the comments section below.
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