China’s central bank is ‘quite worried’ about global risks from some digital currencies

CNBC reports that China’s central bank is “quite worried” about risks to the global financial system from privately developed digital currencies, particularly so-called global stablecoins.

“Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system, etc.,” Fan Yifei, a deputy governor of the People’s Bank of China, told.

“We are still quite worried about this issue, so we have taken some measures,” Fan said.

On Tuesday, the central bank’s business development arm and Beijing city authorities ordered a local company to shut down on allegations it provided software services for cryptocurrency transactions.

The move followed a national-level call in late May to crack down on bitcoin mining and transactions, which has sent miners looking to move operations to the U.S. and other countries. 

“These (digital) currencies have themselves become speculation tools,” Fan said, adding there are potential threats to “financial security and social stability.”

He noted that his work at the central bank included digital currencies. The PBoC is developing a digital version of the Chinese yuan, which has been tested in several parts of the country in the last year.

So far, the invite-only digital yuan system has more than 10 million users, Fan said.

In contrast with bitcoin’s decentralized system, the PBoC’s digital yuan is controlled by the central bank.