Saturday, January 28, 2023

PBoC Expresses Concern Over Financial Risks Associated With Stablecoin

The central bank of China is a bit concerned about the global financial risks involved with digital currencies, especially stablecoins.

Fan Yiefi, deputy governor of the People’s Bank of China (PBoC), expressed his concern over the threats associated with stablecoins. He stated that stablecoins like Tether (USDT), carry some serious threats which could affect the global financial and settlement system.

According to the officials, the private payment systems are developing fastly, which is considered to be a very dangerous situation. Yiefi further stated that PBoC has started working against monopolies and the ‘disorderly expansion of capital.’

He added, “Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system.”

The Chinese government has started taking some measures to restrict the expansion of global stablecoins in the country, said Yiefi. 

PBoC is planning to impose the same restrictive measures on stablecoin, which it applied to Alibaba’s Ant Group.   

A report published earlier stated that in November 2020, the Chinese state government stopped the initial public offering by Ant Group, whose value was $37 billion. The government also introduced an antitrust probe into Alibaba.

Later, Mu Changchun, head of digital currency research at the PBoC, said that digital yuan has been designed to offer backup for major retail payment services like AliPay and WeChatPay. 

The deputy governor of PBoC has mentioned that till date over 10 million people in China use the Digital Yuan in the country.

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