BEIJING, Friday, December 22, 2023- China has called for a coordinated international push to establish robust regulations governing the cryptocurrency market and decentralized finance (DeFi), according to its China Financial Stability Report released in December 2023.1
The latest financial stability report from the People’s Bank of China marks a notable shift in approach, emphasizing the necessity of collaborative efforts to effectively regulate the ever-evolving digital asset landscape.
Industry observers see it as a shift in China’s stance on crypto assets and DeFi.
The PBoC’s (People’s Bank of China) call for a united front is a focal point in the PBoC’s annual financial stability report, which looks into critical issues surrounding the regulation of digital assets.
Breaking away from tradition, the Chinese central bank has carved out a dedicated section in its financial stability report, unveiled on December 22, specifically addressing the issues related to cryptocurrency and crypto assets.
The report in Mandarin not only sheds light on the relatively modest 1% contribution of the cryptocurrency market to the global financial system but also underscores its limited integration with traditional finance. 2
The above report is in Chinese.
The report pushes for a uniform regulatory framework on a global scale, urging governments to adopt the principle of “same business, same risks, same supervision” to counteract the potential pitfalls of regulatory arbitrage.
It also identifies the risks of the decentralized financial systems and cites many cases of collapses in recent times.
China’s pivot towards rallying the global community for joint cryptocurrency industry regulation follows the country’s significant crackdown on cryptocurrencies a few years ago.
- DeFi Standards: https://cointelegraph.com/news/china-pboc-crypto-defi-stability-report[↩]
- DeFi Standards: http://www.pbc.gov.cn/jinrongwendingju/146766/146772/5177895/2023122217072818365.pdf[↩]
