Former Chinese Finance Minister Lou Jiwei recently warned of the overall financial risks associated with cryptos, particularly from the adoption of Bitcoin ETFs in the United States. The statement comes as over-the-counter (OTC) cryptocurrency brokers in China see a significant increase in investment flows.
The Risks of Crypto in China and the Impact of Bitcoin ETFs in the United States
Lou Jiwei warned of the negative implications cryptos could have on global markets, due to price fluctuations that could create financial instability. He stressed that digital currencies are perceived as a threat to financial security, particularly in terms of terrorist financing and the fight against money laundering.
Additionally, Bitcoin ETFs, recently approved in the United States, also raise questions about their potential impact on the global financial system. In times of volatility, these products could accentuate fluctuations in bitcoin prices and create gaps between the price of the ETF and that of BTC. Experts have already observed volatility events that perfectly illustrate these concerns.
Reactions and concerns in China
In response to these crypto developments, the China Securities Regulatory Commission (CSRC) held a meeting to strengthen inter-agency coordination and promote specific monetary policy toolssuch as special loans for share buybacks. This initiative aims to stabilize Chinese financial markets in the face of growing global uncertainties.
China is taking these measures in a rather delicate context, where black crypto trading has exploded, reaching $23.7 billion in 2024. This meteoric growth of the underground cryptocurrency market highlights the urgency of stricter regulation. to protect the financial stability of the country.
The rise of Bitcoin ETFs in the United States and growing concerns in China highlight the challenges and opportunities for cryptos in today's global economy. Regulators must navigate carefully to balance innovation and financial stability.
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