Zhu Guangyao, China’s former finance minister, is advocating that the government examine cryptocurrencies more closely. Speaking at an event at the Tsinghua PBC Chief Economist Forum held in Beijing on Saturday, Zhu said cryptocurrencies are a “key aspect of the development of the digital economy.”
Sina first reported that cryptocurrencies “have negative effects.” He added that China should be fully aware of the risks of this asset class to the capital market. “However, we need to study the latest international developments and policy adjustments, as this is a key aspect of the development of the digital economy.”
According to the report, Zhu pointed to former US President Donald Trump’ s campaign strategy and his public support for cryptocurrencies. Trump, the Republican favorite in the presidential election, said at a bitcoin conference in Nashville in July that the U.S. “must adopt cryptocurrencies, otherwise China will replace us.”
His remarks follow a recent Chainalysis report indicating that Chinese over-the-counter cryptocurrency brokers have seen a steady increase in activity.
Chinese OTC traders reported inflows of $20 billion in each of the three quarters through June, the Bloomberg report said. In addition, OTC cryptocurrency brokers have seen an increase in activity, reaching a total of $75 billion over the past nine months.
The surge has come as Chinese citizens turn to cryptocurrencies at a time when the country’s economy is experiencing negative sentiment. China has banned all cryptocurrency transactions and promised to eradicate the mining of digital assets in 2021.
Eric Jardine, head of cybercrime research at Chainalysis, said China’s cryptocurrency ban is “loosely enforced.” “Given the regulatory context in China, including the ban on trading and mining cryptocurrencies, these services invariably fall into the gray economy.”
