BOAO- China will beef up its regulatory oversight of the digital economy, as new technologies, especially new forms of finance, should not be blindly accepted and recognized, a deputy governor of the central bank said.
Digital currencies and newly invented cryptocurrencies, rather than solving problems in finance, can in fact create new challenges, Xuan Changneng, a deputy governor of the People’s Bank of China, said at the annual Boao Forum in Hainan province.
He did not spell out steps that will be taken to boost oversight.
“The digital economy has changed the format of financial services, but it has not changed the financial model itself,” Xuan said.
Cyclical swings in the sector, micro credit risks and liquidity risk mismatches “still exist”, he said.
In recent years, Chinese regulators have increased scrutiny over the fintech sector as part of a broader campaign to fend off financial risks.
Since late 2020, authorities have stepped up restrictions on the financial arms of online platform businesses after years of rapid expansion, saying a balance between financial innovation and security needed to be struck.
Later in 2021, China’s regulators banned crypto trading and mining amid concerns that cryptocurrency speculation could disrupt the country’s economic and financial order, one of Beijing’s top priorities. – Reuters
