The latest report reported that Fan Yifei, Deputy Governor of the People’s Bank of China has launched an open criticism of Bitcoin (BTC) and Stablecoins, in a State Council policy briefing this morning. He mentioned that bitcoin and stablecoin could lead to threats to the country’s financial security and social stability, as they serve as gateways to money laundering and illegal economic activities.
Fan Yifei at the same time also stressed the risks and dangers of stablecoin as it will bring instability and unsafe storage. In other words it can lead to risks to the international monetary system, payment systems and settlements.
Thus Fan Yifei suggested that the public to make an absolute change by turning to the crypto of the Central Bank of China. A number of researchers believe that CBDC crypto will not affect the existing financial system.
Although the Digital Yuan issued by the central bank is performing well, there is still a lot to be done to align with the fiat currency. There is still a lot of debate going on especially whether the use of CBDC in daily transactions would be an ideal option or not.
Moreover, also the focus of debate is on whether the central bank’s digital Yuan will cause monetary suspension, weaken monetary policy, and whether it will improve bank operations or not.
After China’s crackdown on cryptocurrencies especially BTC, the action against stablecoin and the central bank’s digital Yuan promotion can be seen as a stepping stone before launching CBDC to the public.