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Lou Jiwei, China’s former finance minister, has called for a thorough examination of cryptocurrency implications after the US approved Bitcoin ETFs, warning that digital currencies could destabilize global markets due to their inherent volatility and association with money laundering.
China’s Crypto Alarm: Ex-Finance Minister Urges Action After US Bitcoin ETF Approval
Former Chinese finance minister Lou Jiwei called on China to study cryptocurrency achievements closely during his comments at the 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing.
China Faces Crypto Crisis as Digital Currency Volatility Grows
The former minister reportedly spoke about the dangers of cryptocurrency to the financial system, including its volatility and its involvement in money laundering, as reported by Sina Finance.
Also mentioned was the change in US attitude toward cryptocurrencies, especially when spot Bitcoin ETFs were approved by the US Securities and Exchange Commission.
US Bitcoin ETF Approval Sparks Chinese Concerns
Due to the significant degree to which price swings might cause financial instability, Lou cautioned about the potential negative effects of cryptocurrencies on global markets.
Digital currencies, he said, have long been seen as a danger to monetary stability, especially in contexts like AML and the fight against terrorism funding.
China Urged to Analyze Crypto Risks to Global Financial Systems
To protect financial systems from possible shocks, the former finance minister said these risks should be thoroughly studied and considered.
Per Cointelegraph, the big policy change in the US was pointed up by Lou.
Evaluating the Impact of US Crypto Policy on China
The ex-finance minister has reportedly told Chinese officials to pay attention to how the world views cryptocurrency.
Given the widespread use of cryptocurrencies in the US financial markets, he emphasized the need to evaluate the opportunities and threats posed by the digital economy.
“We also need to study the latest international changes and policy adjustments because they are crucial for the development of the digital economy.”