China to spice up regulatory oversight of digital financial system -c.financial institution official
BOAO, China, March 31 (Reuters) – China will beef up its regulatory oversight of the digital financial system, as new applied sciences, particularly new types of finance, shouldn’t be blindly accepted and recognised, a deputy governor of the central financial institution mentioned on Friday.
Digital currencies and newly invented cryptocurrencies, fairly than fixing issues in finance, can in actual fact create new challenges, Xuan Changneng, a deputy governor of the Individuals’s Financial institution of China, mentioned on the annual Boao Discussion board in Hainan province.
He didn’t spell out steps that shall be taken to spice up oversight.
“The digital economy has changed the format of financial services, but it has not changed the financial model itself,” Xuan mentioned.
Cyclical swings within the sector, micro credit score dangers and liquidity danger mismatches “still exist”, he mentioned.
Lately, Chinese language regulators have elevated scrutiny over the fintech sector as a part of a broader marketing campaign to fend off monetary dangers.
Since late 2020, authorities have stepped up restrictions on the monetary arms of on-line platform companies after years of speedy enlargement, saying a stability between monetary innovation and safety wanted to be struck.
Later in 2021, China’s regulators banned crypto buying and selling and mining amid considerations that cryptocurrency hypothesis might disrupt the nation’s financial and monetary order, one in every of Beijing’s prime priorities.
“Cryptocurrencies lend themselves to risks relating to fraud and unlawful transactions,” Xuan mentioned, including that america had “failed” at regulating cryptocurrencies.
On Thursday, U.S. Treasury Secretary Janet Yellen mentioned the Biden administration is continuous to check the potential for systemic dangers from digital property, an effort that started earlier than the collapse of cryptocurrency trade FTX.
China itself has launched its personal digital renminbi, or yuan, however it’s little used.
Early this month, China mentioned it will arrange a brand new regulatory physique consolidating oversight of the monetary providers trade, which analysts mentioned was geared toward closing loopholes with a number of companies monitoring totally different facets of the $57 trillion monetary sector.
The Nationwide Monetary Regulatory Administration will soak up the China Banking and Insurance coverage Regulatory Fee’s obligations and take over some supervisory features from the central financial institution and the securities regulator.
“The quality of regulatory oversight over the digital economy will be improved,” Xuan mentioned.
“In this era, the demands on financial regulators are higher.”
Reporting by Joe Money and Shuyan Wang; Writing by Liz Lee, Ethan Wang, Ziyi Tang and Ryan Woo; Modifying by Tom Hogue and Sonali Paul
Our Requirements: The Thomson Reuters Trust Principles.
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