The latest financial stability report by the People’s Bank of China stands out for its dedicated section on crypto-assets, signaling a significant shift in regulatory focus.
Released on December 22, this report strategically incorporates a segment specifically targeting crypto-assets. The intent behind this inclusion is to bridge information gaps, reduce market fragmentation, and eliminate regulatory loopholes. A comprehensive paragraph within the report discusses the role of the Financial Stability Board (FSB) in regulating crypto assets.
The report sheds light on the crypto market, accounting for just 1% of the global financial system. It emphasizes the relatively limited integration of cryptocurrencies into traditional finance while highlighting potential risks. Concerns flagged include vulnerabilities to cyberattacks, market manipulation, and issues regarding governance within decentralized finance (DeFi) mechanisms.
Notably, the report cites specific incidents, such as the collapse of the Terra ecosystem and the decline of the FTX exchange in 2022, to illustrate these potential risks.
Simultaneously, the People’s Bank of China announced advancements in leveraging the country’s digital currency. Reports from the South China Morning Post indicate that the Beijing-based commercial bank successfully completed the first-ever cross-border settlement for precious metals trading using the digital yuan.
The transaction, facilitated by the Shanghai branch of the state-owned bank, involved the transfer of $14 million in cash from an international buyer. These funds were then converted into digital yuan and deposited into an account held at the Shanghai Gold Exchange. This move represents China’s continued exploration and implementation of digital currency in financial transactions.
Powered by Crypto Expert BD
Follow us on Twitter: https://x.com/CryptoExpert_BD
Join our Telegram channel: https://t.me/CryptoExpert_BD
