China is now also raging against stablecoins, Tether in the first place.
This is what Fan Yifei, deputy governor of the People’s Bank of China would have said , according to a translation released by CNBC .
“The so-called stablecoins of some commercial organizations, especially global stablecoins, can bring risks and challenges to the international monetary system, payments and settlement systems, etc. We are still quite worried about this problem, so we have taken some measures ”.
The target could be above all Tether , the largest stablecoin by capitalization ( 62 billion dollars ).
Although the value of Tether and other stablecoins is, in fact, stable, the Central Bank of China still sees these currencies as a threat.
Fan stated in this regard:
“These (digital) currencies have themselves become instruments of speculation.”
In short, on the one hand bitcoin must be banned as it is too volatile, on the other even stablecoins, although not volatile, are a threat “to financial security and social stability”.
The only stablecoin allowed in China: the digital yuan
This rage against cryptocurrencies, from bitcoin to stablecoins, comes at a key moment for the Chinese economy. The tests for the release of the digital yuan, the digital version of the local currency, are in fact at an advanced stage . According to the Pboc exponent, at the moment there are already over 10,000 users, chosen by invitation, who are testing the functioning of the coin.
The digital yuan, however, would be very different from classic cryptocurrencies. Not only does it faithfully reproduce the value of the yuan, of which it is in fact an alternative and complementary version, but it is by its nature totally centralized. Controlling it, the PBOC itself, the same that declared war on bitcoin.
It is no coincidence that now, after closing crypto activities and banning mining farms, the attention of the Chinese authorities is shifting towards stablecoins. It is precisely these currencies that represent a concrete threat to China given their non-volatile nature and anchored to a stable value of a currency for current use (generally the dollar, but there are also stablecoins linked to the euro and other local currencies).
In short, all the conditions are in place for China’s control over crypto activities to become even more stringent.
The market reaction
Just like last May 19 , when a new ban on cryptocurrency service providers was announced from China, today’s news also shakes the market. Tether clearly remains firmly anchored to the value of one dollar, with minimal and physiological fluctuations of 1 cent.
On the contrary, Bitcoin today loses 5.6% and returns to test the $ 32,500. Worse is Ethereum which loses more than 8% and returns to $ 2,180.
In short, China, thanks to its economic and social weight, has once again managed to direct the crypto market.