HomeNewsChina Intensifies Focus on Crypto Regulation, Urges Global Cooperation

China Intensifies Focus on Crypto Regulation, Urges Global Cooperation

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  • China’s People’s Bank of China (PBC) emphasizes increased regulation of crypto assets in its Financial Stability Report 2023.
  • The report calls for international cooperation to manage risks associated with crypto assets, highlighting the need for a unified global regulatory approach.

A Global Approach to Tackle Crypto Challenges

China’s central bank, the People’s Bank of China (PBC), in its latest Financial Stability Report, has laid out an enhanced focus on the regulation of crypto assets. This strategic pivot comes amid rising global financial risks associated with cryptocurrencies. The report underscores the significance of the principle

“same business, same risks, same supervision,”

emphasizing the need to fill data gaps, reduce market fragmentation, and eliminate regulatory arbitrage opportunities.

International Cooperation: The Key to Crypto Regulation

The PBC’s report draws attention to the global nature of the crypto market and its inherent risks, as acknowledged by France and other nations. It proposes a global forum for countries to make unified decisions on crypto regulation, highlighting the crucial role of international collaboration in overseeing this sector. This approach aims to address challenges related to insider control, asset concealment, and data security, particularly in the blockchain domain.

Navigating the Complex Crypto Landscape

While acknowledging that crypto assets represent a small fraction (1%) of the global financial system, the report stresses the need for sweeping reforms. It advocates for a comprehensive overhaul of the registration system, allowing regulatory bodies like the China Securities Regulatory Commission to employ “negative feedback” mechanisms for risk management.

Addressing the Risks and Vulnerabilities

Recent market upheavals, like the FTX collapse, have heightened volatility and speculative tendencies in the crypto market. The PBC report outlines a multi-faceted strategy focusing on access, control, operation, governance, exit, and supervision of crypto assets. It warns of the dual risks posed by financial and digital technologies, highlighting the susceptibility of crypto assets to hacking and fraud, particularly in the decentralized finance (DeFi) sector.

Forging a Unified Regulatory Front

The People’s Bank of China’s report underscores the urgency of establishing a global supervisory body to effectively manage the cross-border nature of crypto assets. As the digital asset landscape continues to evolve, this call for international regulatory cooperation marks a critical step towards creating a safer and more stable financial ecosystem.

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AnnJoy Makena
AnnJoy Makenahttps://www.ethnews.com
Annjoy Makena is an accomplished and passionate writer who specializes in the fascinating world of cryptocurrencies. With a profound understanding of blockchain technology and its implications, she is dedicated to demystifying complex concepts and delivering valuable insights to her readers. Business Email: info@ethnews.com Phone: +49 160 92211628