Executives from the People’s Bank of China say the adoption of cryptocurrencies is a “huge challenge”

The rapid adoption of cryptocurrencies such as Bitcoin (Bitcoin) Poses a major challenge to the traditional financial system, an executive from the People’s Bank of China warned.

Wen Xinxiang, director of the Payment and Settlement Department of the People’s Bank of China (PBoC), expressed concern about the growing popularity of cryptocurrencies and stablecoins linked to fiat currencies.

Pointing out that the market value of Bitcoin has now exceeded US$800 billion and the total market value of stablecoins has exceeded US$120 billion, Wen outlined the main risks associated with the crypto market at the Payment and Settlement Forum on September 24, Shanghai Securities News Report.

According to the official, one of the main challenges of encryption is that the industry can operate separately from traditional payment systems supported by commercial banks and payment institutions. According to reports, cryptocurrency has also caused problems for banks’ payment services and weakened the power of clearing organizations.

Wen also argued that the so-called anonymity of cryptocurrency makes it an attractive tool to promote illegal transactions such as money laundering, and urged that more measures be taken to allow the traditional financial system to compete with cryptocurrency:

“The challenge of virtual currency is huge. When dealing with the competition of large technology companies in the financial industry, the traditional financial system can also rely on traditional methods such as law and supervision to increase anti-monopoly efforts and strengthen personal privacy and information protection.”

related: China’s new decentralized stablecoin targets international trade

Wen’s remarks further reiterated the Chinese government’s anti-crypto stance, as China continues to crack down on crypto trading and mining this year, and local authorities Close multiple mines with Suspend crypto trading transactions.

Fan Yifei, Deputy Governor of the People’s Bank of China Concerned about stablecoins In July, it stated that the pace of development of the private payment system was “very amazing”.Although the Chinese government is skeptical of stablecoins, some local participants still Try a decentralized stablecoin Linked to the digital currency of the People’s Bank of China, the digital renminbi.