Former Chinese Financial Official: Cryptocurrencies Must Be Regulated With Proper Regulations, Not Banned

Several parties have urged the Chinese government to review the ban on crypto assets. (Photo; Doc. CryptoCoinSpy)

JAKARTA A former senior Chinese financial official, Zhu Guangyao, called on the Chinese government to review strict policies regarding the ban on cryptocurrencies. In a forum in Beijing, Zhu conveyed the importance of digital assets for China's digital economy growth, given the increasingly fierce global competition, especially from the United States.

Zhu menjelaskan, meskipun aset digital seperti kripto memiliki potensi risiko, seperti volatility harga dan kemungkinan disalahkan untuk aktivitas ilegal, pendekatan yang lebih baik adalah melalui regulasi yang ketat daripada larangan menyeluruh. Pernyataan Zhu ini datang saat Amerika Serikat mulai mengadapkan kebijakan yang lebih terbuka terhadap kripto, menimbulkan pengoduran mengenai masa depan regulasi aset digital di China.

The risk of virtual currency can be managed through appropriate regulations, not with a total ban, Zhu said, as quoted by the South China Morning Post.

The ban on cryptocurrencies in China was first implemented in 2017, when the government banned initial coin offerings (ICO) and closed crypto exchanges. In 2021, Beijing tightened this policy by banning Bitcoin mining and declaring all activities related to illegal cryptocurrencies. However, Zhu stressed that this ban only encourages crypto trading to the black market, which is more difficult to regulate.

Meanwhile, Hong Kong is taking a different approach by seeking to become a global digital asset center, which is quietly gaining support from Beijing. Earlier this year, Hong Kong approved trading crypto exchange-traded funds (ETF), showing policy differences between the region and China's main mainland.

This situation has also attracted attention in the United States, where former President Donald Trump called on the US to embrace digital assets to reduce China's influence. In addition, US Vice President Kamala Harris also recently expressed her support for innovative technologies, including cryptocurrencies.

On the other hand, Wang Yang, a leading economist in China, criticized the crypto mining ban he called "unwise", for moving economic opportunities to other countries, especially the United States. He also warned that if Trump returned to office, China might face greater financial isolation.

Huanghiring, a former member of China's Central Bank policy board, added that the current crypto ban could hamper China's ability to leverage blockchain technology and digital innovation. He suggested that the government reconsider the policy for the advancement of the country's digital economy.

Currently China is at an important crossroads. Will it continue to ban crypto and risk being left behind in global digital economic competition, or will it start opening up to digital assets and compete again in the international arena.