Beijing continues to express negative sentiments about cryptocurrencies, in the midst of a nationwide crackdown, this time with the central bank calling out stablecoins as a source of instability.
Fan Yifei, deputy governor of the People Bank of China, said stablecoins – a cryptocurrency usually pegged to a reserve asset like the U.S. dollar or gold – posed serious risks to the global financial system.
Speculation of atablecoins have threatened financial security and social stability while also being used as a payment for illegal activities and money laundering, Fan said at a press briefing yesterday.
He added that the government had already taken some action to limit stablecoin growth in the country.
Digital Yuan Push
In contrast, Fan underlined that the digital yuan did not have the same problems as stablecoins.
He also highlighted that those interested can apply to join a «white list» at state-owned banks that distribute the digital currency with 10 million such users on the list.
«We have the confidence to continue increasing the scope of the trials,» said Fan, naming the Beijing Winter Olympics in 2022 as the location for the next key trial.
Stablecoin Growth
While the promise of stablecoins is to act as a replication of fiat currencies, it is currently being largely used as a medium to park money on crypto exchanges for relative ease compared to cash.
Alongside the broader crypto market, stablecoins have experience tremendous growth with the two largest coins – Tether and USDC – boasting a total market capitalization of over $100 billion, as of the end of May.
