Zhu Guangyao, former Chinese minister of Finance has called on the Chinese government to carry out more research on cryptocurrency so as to make a more informed decision regarding the status of the industry in China.
At the time of the report, cryptocurrency is officially banned in China.
Still, underground dealings have reached astronomical heights since the ban revealing the high demand for crypto assets in the country.
Zhu made his remark at an event at Tsinghua PBC Chief Economist Forum where he opined that digital assets like crypto are a crucial aspect to the development of the digital economy.
Despite his optimism about cryptocurrency and the role it plays in developing the Digital economy, Zhu still highlighted the risks associated with it.
“ Cryptos have negative effects. China should fully recognize 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,” Zhu Said
In addition to his remarks, Zhu pointed out Donald Trump’s promotion and pro-crypto stance throughout his campaign trail. He especially referred to Donald Trump’s speech during the Bitcoin Conference in Nashville. He pointed out that Trump emphasized the need for the United States to embrace crypto unless it will be overtaken by China.
Donald Trump also advocated for the building of the crypto industry in the United States to stay ahead of China.
China’s OTC Market Thriving Amid Ban
Crypto is officially Banned in China but Over-the-counter brokers have been making a serious killing according to a Chainalysis report.
China OTC traders witnessed an inflow of $20 billion in each of the three quarters through June, according to a Bloomberg report.
Chinese OTC crypto brokers in addition to the above inflow witnessed a surge in activity, with a cumulative total of $75 billion in the past nine months.
This surge in OTC crypto activity follows a stalling Chinese economy with Chinese citizens looking to alternatives means of investment. The crypto ban in China means these citizens have no option but to patronize OTC brokers.
Before the Ban, China was home to thousands of crypto miners who were a huge part of the global crypto ecosystem.
What to Know
- Chainalysis Cybercrime research lead Eric Jardine revealed that the crypto ban in China is very loosely enforced hence the high OTC trading activity.
- He added that Crypto trading and mining literally fall in the gray zone of the Chinese economy.