Former Chinese finance minister urges review of crypto policies

At the 2024 Tsinghua PBC Chief Economist Forum, former Chinese Vice Minister of Finance Zhu Guangyao called for a reassessment of China’s strict stance on cryptocurrencies. 

Zhu urged policymakers to study international developments in the digital asset space, especially given the evolving global policies and China's role in the digital economy. 

China has maintained a firm position against crypto since 2013, when it barred banks from handling Bitcoin transactions. 

The restrictions intensified in 2017 when the country prohibited Initial Coin Offerings (ICOs) and ordered the closure of cryptocurrency exchanges, citing concerns over criminal activities like money laundering and drug trafficking. 

By 2021, China had escalated its measures, banning crypto mining and declaring all crypto-related transactions illegal. 

Major exchanges, such as Binance, were forced to relocate, and traders increasingly used foreign platforms through VPNs. 

However, Zhu emphasised the need to monitor changing international policies, noting that the U.S., in particular, has shifted its approach. 

He pointed to the approval of 11 Bitcoin (CRYPTO:BTC) ETFs by the U.S. Securities and Exchange Commission (SEC) and the emergence of Ethereum ETFs, despite the SEC’s previous reluctance. 

He also highlighted the growing political support for cryptocurrencies, especially from figures like U.S. presidential candidate Donald Trump, who publicly stated, "We must embrace cryptocurrencies, otherwise China will replace us." 

Zhu further observed that other emerging economies, including the BRICS nations (Brazil, Russia, India, China, and South Africa), are also exploring ways to incorporate cryptocurrencies into their financial systems. 

He noted that while crypto poses risks, it is crucial for China to "study the latest international changes and policy adjustments."