Shift

United

2024

During a <a href="https://finance.sina.cn/hy/2024-09-28/detail-incqsnva4352322.d.html?oid=3826804018400032&amp;vt=4" rel="noopener noreferrer nofollow">speech</a> at the 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing, former Chinese finance minister Lou Jiwei urged China to scrutinize the rapid advancements in cryptocurrency. His comments reflect growing concerns within China’s financial sector about the impact of digital currencies on global markets.
<h2 id="span-style-font-weight-400-cryptocurrency-s-threat-to-financial-stability-span">Cryptocurrency’s Threat to Financial Stability</h2>
Lou highlighted the risks posed by cryptocurrencies, particularly their notorious volatility and potential use in illegal activities like money laundering. Speaking at the forum, he cautioned that while digital assets may offer innovative opportunities, they also present significant threats to financial security.
In particular, he pointed to the role crypto could play in destabilizing global financial markets, citing the unpredictability of their price movements.
“Digital currencies have long been perceived as a challenge to financial stability,” Lou noted, underscoring the dangers posed by Anti-Money Laundering (AML) concerns and terrorism financing. He emphasized that these risks must be carefully analyzed to safeguard financial systems from unexpected shocks.
<h2 id="span-style-font-weight-400-the-u-s-shift-on-bitcoin-etfs-span">The U.S. Shift on Bitcoin ETFs</h2>
Lou’s speech also touched upon the major policy shift in the United States, where the Securities and Exchange Commission (SEC) recently <a href="https://thecoinrise.com/sec-might-approve-spot-bitcoin-etf-as-a-political-necessity-td-cowen/" rel="noopener noreferrer nofollow">approved Bitcoin Exchange-Traded Funds (ETFs)</a>. This signals a broader acceptance of cryptocurrency in U.S. financial markets.
For China, Lou urged policymakers to closely monitor these international developments. He stressed the importance of understanding both the risks and innovations brought by the digital economy, especially as Western countries adjust their regulatory approaches to cryptocurrencies. “We need to study the latest international changes and policy adjustments because they are crucial for the development of the digital economy,” Lou stated.
<h2 id="span-style-font-weight-400-china-s-mining-dominance-span">China’s Mining Dominance</h2>
Despite <a href="https://thecoinrise.com/china-pressures-state-owned-enterprises-to-halt-any-bitcoin-mining-activity/" rel="noopener noreferrer nofollow">China’s 2021 ban on Bitcoin mining</a> and trading, the country remains a dominant player in the cryptocurrency space. Lou highlighted that China still controls over 55% of the global Bitcoin mining network through mining pools, a figure that continues to underscore the country’s influence.
However, the balance of power is gradually shifting. <a href="https://x.com/ki_young_ju/status/1838140712736711110" rel="noopener noreferrer nofollow">According</a> to CryptoQuant CEO Ki Young Ju, U.S.-based mining pools now manage around 40% of Bitcoin’s mining operations, catering primarily to institutional miners.
The post <a href="https://thecoinrise.com/former-chinese-finance-minister-lou-jiwei-warns-of-crypto-risks/" rel="noopener noreferrer nofollow">Former Chinese Finance Minister Lou Jiwei Warns of Crypto Risks</a> appeared first on <a href="https://thecoinrise.com/" rel="noopener noreferrer nofollow">TheCoinrise.com</a>.

Former Chinese Finance Minister Lou Jiwei Warns of Crypto Risks

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