Former Chinese Finance Minister Advocates for Increased Crypto Research

Former Chinese Finance Minister Advocates for Increased Crypto Research

Zhu Guangyao, the former Chinese Minister of Finance, is urging the government to conduct more extensive research into cryptocurrencies. Speaking at the Tsinghua PBC Chief Economist Forum in Beijing, Zhu emphasized that cryptocurrencies play a significant role in the development of the digital economy.

He acknowledged the potential negative effects of cryptocurrencies but stressed the importance of understanding the associated risks to the capital market. Zhu stated that it is vital for China to keep pace with international developments and policy changes in the cryptocurrency space.

Zhu referenced former US President Donald Trump's campaign strategy, highlighting Trump's call for the U.S. to embrace cryptocurrencies to maintain its competitive edge against China. During the Bitcoin Conference in Nashville, Trump warned that without embracing this technology, the U.S. could be overtaken by China.

His comments come amid a report from Chainalysis indicating that Chinese over-the-counter (OTC) cryptocurrency brokers are experiencing a notable increase in activity. The report revealed that these brokers saw inflows of $20 billion in each of the three quarters leading up to June, resulting in a total of $75 billion over the past nine months. This surge in activity occurs as Chinese citizens seek alternatives in the face of economic challenges.

Despite China’s strict ban on all cryptocurrency transactions and mining since 2021, the enforcement of this ban appears to be lax, according to Chainalysis's Eric Jardine. He noted that these activities now exist in a gray area of the economy, as many Chinese citizens continue to engage with cryptocurrencies despite regulatory restrictions.