US Failed At Regulating Crypto, Says Chinese Central Bank Ahead Of Elon Musk’s China Visit

Chinese central bank People’s Bank of China (PBOC) official on Friday said the U.S. has failed at regulating crypto, causing the banking crisis impacting the global banking sector. The official calls for stronger regulation of the crypto or digital assets industry to prevent any financial risk.

China Central Bank Official Urges US to Regulate Crypto

During a panel at the Boao Forum, Xuan Changneng, Deputy Governor at the People’s Bank of China, blamed risks and fraud in the crypto for the collapse of two American banks. He believes regulators should consider imposing some rules and regulations before accepting new innovations.

“Risks and fraud associated with cryptocurrency, including the two American banks who ran into troubles after providing many services for crytocurrency from taking deposits to settlement, showed that regulators should respect rules when innovating regulation.”

He asserts that authorities must consider upgrading “regulation philosophy, technology, and capability” to ensure financial stability. It will help in adopting financial innovation without impacting financial stability.

According to Bloomberg, Xuan Changneng didn’t name any US lenders but was referring to crypto-friendly Silvergate, Signature Bank, and Silicon Valley Bank. However, the reports suggest that banks failed due to regulators closing banks without deep discussions. Regulators closed banks due to continuous rate hikes by the U.S. Fed.

China always had a strict stance against crypto. PBOC declared initial coin offerings illegal and restricted crypto trading in 2017. Later in 2021, the Chinese government’s aggressive crypto crackdown caused a permanent ban on crypto trading and mining.

China Vice Finance Minister Liao Min said China needs to cooperate and coordinate with other countries to develop a common standard for the crypto industry.

Li Bo, deputy managing director at the International Monetary Fund, believes central banks globally should consider digitizing their reserves. It will help improve the efficiency of cross-border payment. In fact, China is already pushing for international support for Digital Yuan.

Elon Musk China’s Visit

Billionaire Elon Musk, who has always supported new technologies such as Bitcoin and crypto especially Dogecoin, plans a China’s visit in early April. Musk seeks a meeting with China’s Premier Li Qiang.

China is an important market for Tesla and Twitter. Moreover, Tesla seeks to build a new US plant with China’s dominant battery maker Contemporary Amperex Technology Co Ltd.

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