China’s Ex-Finance Minister Calls for More Research into Cryptos

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Sujha Sundararajan

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Sujha Sundararajan

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Last updated:

September 30, 2024 07:11 EDT

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Zhu Guangyao, former Chinese minister of Finance, advocates for the government to research cryptocurrency more closely.

Speaking during an event at Tsinghua PBC Chief Economist Forum, held in Beijing on Saturday, Zhu said that cryptos are a “crucial aspect to the development of the digital economy.”

First reported by Sina, he first highlighted that cryptos “have negative effects.” He added that China should fully recognise the risks associated with the asset class to the capital market.

“But we must study the latest international changes and policy adjustments because it is a crucial aspect to the development of the digital economy.”

According to the report, Zhu pointed to former US President Donald Trump’s campaign strategy and his public embrace of cryptocurrencies.

Trump, the Republican presidential frontrunner, said during the Bitcoin Conference in Nashville in July that the US “must embrace cryptocurrencies, otherwise China will replace us.”

Donald Trump also advocated building the industry to stay ahead of China

His remarks follow a recent Chainalysis report indicating that Chinese over-the-counter cryptocurrency brokers are witnessing a steady spike in activity.

China OTC traders saw inflows of $20 billion in each of the three quarters through June, a Bloomberg report read. Further, OTC crypto brokers witnessed a surge in activity, with cumulative total of $75 billion in the past nine months.

The surge comes as Chinese citizens turn to crypto at a time when the country’s economy is seeing negative sentiment. China banned all crypto transactions and vowed to root out mining of digital assets in 2021.

Chainalysis’ cybercrimes research lead Eric Jardine said that China’s ban on cryptos is “loosely enforced.”

“Given the regulatory context in China, including the ban on trading and mining of cryptocurrency, these services invariably fall in a gray zone of the economy.”