Fan Yifei, deputy governor of the People’s Bank of China, stated the speculative and volatile nature of both Bitcoin (BTC) and stablecoins, at a State Council conference this morning.

Fan said that bitcoin and stablecoins pose a potential threat to the country’s financial security and social stability, as the decentralized digital currency has become a gateway to money laundering and illegal economic activities.

The same speaker also addressed the security flaws and safety risks associated with stable currencies that are supposed to be safe, where he commented about them by saying:

The so-called stablecoins of some trading organizations, especially global stablecoins, may bring risks and challenges to the international monetary system, payment and settlement system, etc.

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Central Bank Digital Currency vs Bitcoin:

Van Yves encouraged people to make an absolute shift towards central bank digital currencies.

He said the People’s Bank of China saw a successful unanimous response to the central bank’s currency.

Central bank currency is issued mainly to institutional entities such as commercial banks and is mostly used for settlements of large value.

While the digital yuan issued by the central bank has performed well, the digital yuan has yet to be widely offered to retail users, which is a long way to reach a positive consensus.

to speak On the multiple discussions about the economic efficiency of a retail digital currency and whether issuing it to the public for day-to-day transactions would be an ideal option, Van Yvey said:

The debate over whether central retail bank digital currency will cause de-intermediation will weaken monetary policy, and whether it will increase bank operations, etc., more focused.

We are also very concerned about these issues.

We are currently in the process of testing.

He added:

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We always pay close attention to the impact of this digital renminbi on the monetary system, monetary policy and financial stability.

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Amid the historical Chinese crackdown on cryptocurrencies, the extended attack on stablecoins and the promotion of central bank digital currency can be seen as a revitalization of China’s last phase of the crackdown before it released its digital currency to the public.

This latest phase of the crackdown could lead to a further drop in the price of Bitcoin in the short term.

Bitcoin was a potential threat to China’s plans to implement its own digital yuan, and the Chinese government moved, banning Bitcoin mining, causing the price of Bitcoin to drop to what it is now.

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