Chinese authorities have rejected virtual currencies as legal tender, stating they are not equivalent to fiat money. In a recent domestic meeting, it was revealed that China will accelerate its review and tightening campaign on virtual currencies, particularly stablecoins, under its financial policies. The objective of this move is to stabilize the financial system and mitigate potential financial risks posed by virtual currencies. Although virtual currencies, which exist in digital form, are rapidly gaining popularity worldwide, China has consistently maintained strict control over them. Due to their lack of legal status, these currencies are not considered part of the financial system, and China has previously imposed various restrictions on their trading and use. Stablecoins, typically pegged to stable assets like the US dollar, have aimed to bring stability to the market; however, Chinese officials have decided to bring them under regulatory scrutiny as well. This step by China could impact the global virtual currency market, as China hosts one of the largest crypto markets in the world. Furthermore, it may encourage other countries to reassess their financial policies. For users and investors of virtual currencies, this serves as a warning that further restrictions on buying, selling, and usage may be imposed in the future. While China’s stringent stance is viewed as an effort to ensure transparency and stability in the financial system, it may also create uncertainty within the crypto market. Investors are advised to closely monitor China’s new policies and global financial trends to avoid potential risks.
Source: coindesk
