The rapid adoption of cryptocurrencies such as Bitcoin (BTC) poses a major challenge to the traditional financial system, a member of China's central bank board has warned.
Pointing to Bitcoin's market value currently exceeding $800 billion and the total stablecoin market capitalisation exceeding $120 billion, Wen outlined the main risks of the cryptocurrency market in the payments and settlement forum.
According to the official, one of the main challenges with cryptocurrencies is that the industry is able to operate independently of the traditional payment system operated by commercial banks and payment institutions. Cryptocurrencies also cause problems with payment services by banks, weakening the power of clearing organisations, Wen reportedly noted.
PBoC deputy governor Fan Yifei had previously raised concerns about stablecoin in July, saying the pace of development in the private payment system was "very worrying". Despite the Chinese government's scepticism about stablecoins, some local players are experimenting with decentralised stablecoins linked to China's central bank's digital currency, the digital yuan.
