While Visa and other large private payment networks consider stablecoins promising, China’s central bank believes they pose substantial hazards to global financial institutions. According to a senior official, the Chinese central bank is “quite concerned” about the global financial dangers related to digital currencies, notably stablecoins.
According to CNBC, Fan Yifei, a deputy governor of the People’s Bank of China (PBoC), highlighted concerns about the allegedly substantial threat stablecoins like Tether (USDT) represent to global banking and settlement systems.
The official stressed that the rate of development in private payment systems is “extremely frightening,” and that the PBoC is attempting to combat monopolies and “disorderly capital expansion,” adding: “The so-called stablecoins issued by some commercial entities, particularly global stablecoins, may provide hazards and problems to the international monetary system, as well as the payments and settlement system.”
The expansion of global stablecoins
Fan stated that the Chinese government has already taken steps to limit the spread of global stablecoins. The deputy governor emphasized that the PBoC will apply the same restrictive measures to other businesses in the payment services sector that it did to Alibaba’s Ant Group.
As previously reported, the Chinese government stopped Ant’s $37 billion IPO last November and launched an antitrust investigation into Alibaba. Mu Changchun, the PBoC’s head of digital currency research, later stated that the primary goal of China’s central bank digital currency is to offer backup for direct retail payment services such as AliPay and WeChat Pay. According to Fan, China’s invite-only digital yuan system has over 10 million users.
Apart from warning about stablecoins, Fan also slammed significant cryptocurrencies such as Bitcoin (BTC), claiming that they have become speculative tools and pose possible dangers to “financial security and societal stability.
Meanwhile, several of the world’s largest payment providers, such as Visa, have reaffirmed their support for stablecoins.
Ethereum Falls 10%
On Thursday, Ethereum was trading at $2,134.58 on Investing.com, down 10.03 % on the day. It was the most significant percentage fall in a single day since June 21. Ethereum’s value has increased by 2.56 % over the last seven days. The volume of Ethereum traded in the twenty-four hours to the time of writing was $22.18B, accounting for 27.86% of the total volume of all cryptocurrencies. In the last seven days, it has moved in a range of $2,019.7458 to $2,402.6785.
Bitcoin was last seen on the Investing.com Index at $32,277.4, down 6.77 percent on the day. On the Investing.com Index, Tether was trading at $0.9993, a 0.11 percent loss. Bitcoin’s market cap was last at $610.09B, representing 44.24 percent of the overall cryptocurrency market cap.