BOAO, China, March 31 (Reuters) – China will step up its regulatory oversight of the digital economy as new technologies, particularly new forms of finance, should not be blindly accepted and recognized, a deputy governor of China’s central bank said on Friday.
Digital currencies and reinvented cryptocurrencies, instead of solving financial problems, can actually create new challenges, Xuan Changneng, deputy governor of the People’s Bank of China, said at the annual Boao Forum in Hainan province.
He did not set out any steps being taken to improve oversight.
In recent years, Chinese regulators have scrutinized the fintech sector as part of a broader campaign to avert financial risks.
Since late 2020, after years of rapid expansion, authorities have tightened restrictions on the financial arms of online platform companies, stating that a balance needs to be struck between financial innovation and security.
Later in 2021, China’s regulators banned crypto trading and mining amid concerns that cryptocurrency speculation could disrupt the country’s economic and financial order, a top priority for Beijing.
China itself has launched its own digital renminbi, or yuan, but it is little used.
Earlier this month, China announced it would set up a new regulator to consolidate oversight of the financial services industry, which analysts said aims to close loopholes as multiple agencies oversee various aspects of the $57 trillion financial sector.
The National Financial Regulatory Administration will assume the responsibilities of the China Banking and Insurance Regulatory Commission and take over some supervisory functions from the central bank and the securities regulator.
Reporting by Joe Cash and Shuyan Wang; writing by Liz Lee, Ethan Wang, Ziyi Tang and Ryan Woo; Edited by Tom Hogue and Sonali Paul
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