Former Chinese Deputy Finance Minister Calls on Government to Re-evaluate Its Approach to Bitcoin and Crypto

Zhu Guangyao warned of the risks posed by digital assets but emphasized their growing significance in the global digital economy.

China’s former deputy Finance Minister has called on the government to reconsider its approach to Bitcoin and cryptocurrency, highlighting the growing significance of digital assets in the global economy.

Speaking at the 2024 Tsinghua Wudaokou Chief Economist Forum on Sept. 28, Zhu Guangyao acknowledged the risks posed by cryptocurrencies, particularly their potential to disrupt anti-money laundering and counter-terrorism financing efforts. However, he stressed the need for deeper research into the technology and its applications.

According to local media reports, Zhu highlighted the US's shifting stance on cryptocurrencies, with former President Donald Trump incorporating crypto into his campaign platform and the US Securities and Exchange Commission approving 11 Bitcoin exchange-traded funds for listing on stock and futures markets in 2024.

He pointed out that US policy initially viewed crypto as a threat due to its volatility and impact on global financial markets, but this changed as the government realized the importance of digital assets in the emerging digital economy.

The forum discussed the need for China to remain informed about international shifts in crypto policy to ensure the country remains competitive in the rapidly evolving digital economy.

China first imposed restrictions on Bitcoin in 2013, prohibiting financial institutions from engaging in crypto transactions. However, this failed to stop the burgeoning industry from growing in the country.

Over the ensuing years, the government escalated its measures, banning initial coin offerings in 2017 and shutting down domestic crypto exchanges.

A few years later, in 2021, China implemented a complete ban on Bitcoin mining and trading, citing concerns over financial stability, fraud, and environmental impacts. This ban effectively prohibited all forms of crypto transactions, causing many crypto-related businesses to relocate abroad.

Despite the crackdown, some underground trading persisted through decentralized platforms, with volumes continuing to reach billions of dollars. Chinese mining pools also continue to dominate the Bitcoin hashrate despite the blanket ban within the country.

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