Central Bank of China Calls for International Regulation of Crypto to Ensure Financial Safety

The People’s Bank of China: Focused on Crypto

The People’s Bank of China (PBC) is doubling down on its focus on crypto assets in its recent Financial Stability Report 2023. The report emphasizes the need for consistent oversight in the global crypto market, advocating for a unified global approach to supervision. France’s acknowledgment of crypto asset risks further supports the call for stronger international coordination in regulatory matters.

Crypto Oversight: PBC Urges Global Collaboration

The PBC report urges international cooperation in crypto asset regulation, emphasizing the need for a unified global approach to supervise this burgeoning sector. However, the report raises concerns about insider control, asset concealment, and blockchain-off-chain data security associated with crypto assets. Its increasing volatility and speculative nature have raised alarms since 2022.

Steps To Secure Defi Ecosystem

The report outlines a comprehensive six-pronged strategy to tackle the challenges of decentralized finance (DeFi), warning of potential global financial threats posed by transparent cross-border transactions. It emphasizes the urgent need for regulatory restructuring and market reforms, advocating for an overhauled registration system.

Stringent Stance on Regulation

The PBC report identifies risks in crypto assets, stressing the need for preemptive measures against maturity mismatch, excessive leverage, and procyclicality risks. Recognizing the susceptibility to cyber threats, the report underscores the necessity for a collaborative international framework. Overall, the PBC’s comprehensive report emphasizes a stringent stance on regulating crypto assets, prioritizing international cooperation and a restructured regulatory framework to mitigate risks and safeguard the global financial ecosystem.

Hot Take

The PBC’s Financial Stability Report 2023 underscores the importance of international cooperation and a restructured regulatory framework to effectively manage risks associated with crypto assets and safeguard the global financial ecosystem.