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China Says Stablecoins Poses Risks to the Financial Market

The ex-Chairman of Shanghai Bank, Fan Yifei, has said during an interview has expressed the concerns of the Chinese apex bank about stablecoins stating that this class of digital assets only serve as “speculation tools.”

According to Yifei, stablecoins could harm the global financial market and the current payment system in the world. In his words, “Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system and payments and settlement system, etc.”

Yifei, who is a current deputy governor of China’s central bank, also went on to reveal that the bank has concerns about these coins. He asserted that the bank is “quite worried about this issue” and that they are already taking actions in that direction.

Is China CBDC Geared Towards Dominating Crypto Space?

China is the leading country working on a central bank digital currency. Unlike the decentralized nature of the crypto industry, the digital yuan is a digital asset that is entirely controlled by the country’s apex bank.

According to the Global Head of Equity Strategy at Jefferies, Christopher Wood, China’s recent negative stance towards the crypto space is its attempt to remove all competitions against its digital fiat currency.

He went on to say that the government does not really care about the environment or the CO2 emissions of crypto mining. To him, what the country wants to do is to reduce the level of competition its digital yuan would be facing.

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