Former Chinese Finance Minister Urges Caution on Crypto Risks Amid Shifts in U.S. Policy

Speaking at the Tsinghua Wudaokou 2024 Chief Economists Forum in Beijing, former Chinese Finance Minister Lu Jiwei urged China to carefully assess the progress and risks associated with cryptocurrencies.

Lu has reportedly highlighted the potential threats that digital currencies pose to financial stability, such as volatility and their use for money laundering. He also noted the changing stance of the United States towards cryptocurrencies, especially after the U.S. Securities and Exchange Commission approved Bitcoin exchange-traded funds (ETFs).

Lou highlighted the risks that cryptocurrencies could bring to global financial stability, including concerns related to anti-money laundering (AML) and terrorist financing. He called for a thorough examination of these risks to protect financial systems from potential disruption.

Lu also pointed to the significant shift in US policy on cryptocurrencies, urging Chinese policymakers to study these global changes. He stressed that it is important to understand both the risks and innovations in the digital economy as cryptocurrencies are increasingly accepted in global markets.

Despite China’s 2021 ban on mining and trading Bitcoin, the country still controls over 55% of the BTC mining network, although this dominance is gradually shifting to US mining firms.