At the 2024 Tsinghua Wudaokou Chief Economists Forum held in Beijing on September 29, 2024, former Finance Minister Lou Jiwei underscored the pressing need for China to reassess its cryptocurrency policies in light of recent developments in the United States. Lou pointed to the U.S. Securities and Exchange Commission's (SEC) approval of spot Bitcoin ETFs as a significant policy shift, reflecting a growing acceptance of cryptocurrencies that China cannot afford to ignore [6ac82dad].
Lou emphasized that Chinese policymakers must study international trends and address the risks associated with cryptocurrencies, such as market volatility and money laundering. He argued that understanding these dynamics is crucial for navigating the complexities of the digital economy effectively [6ac82dad].
Adding to this dialogue, former Finance Minister Zhu Guangyao also spoke at the same forum, advocating for a reevaluation of China's stance on cryptocurrencies. He highlighted the importance of adapting to global shifts in regulation, particularly as the U.S. has approved 11 Bitcoin ETFs this year, raising concerns about China's competitiveness in the digital economy [07f551ff].
Despite implementing strict regulations on cryptocurrencies since 2021, including a ban on Bitcoin mining and trading, China still controls over 55% of Bitcoin's mining operations through mining pools. This statistic starkly contrasts with U.S. pools, which primarily focus on institutional miners [6ac82dad].
Furthermore, Tron founder Justin Sun has echoed calls for a policy shift, suggesting that China should align its regulations with the warming policies in the U.S. This sentiment reflects a broader industry perspective that China needs to adopt a more progressive approach to cryptocurrencies [07f551ff].
In a related context, on October 26, 2024, Reserve Bank of India (RBI) Governor Shantikanta Das expressed significant concerns regarding the risks cryptocurrencies pose to financial stability. Speaking at the Peterson Institute for International Economics, Das warned that cryptocurrencies could lead to a loss of control over the money supply by central banks, impacting liquidity management and inflation control. He emphasized the need for international cooperation to address these risks, acknowledging that this perspective may not be popular but is crucial for maintaining financial stability [3da187f6].
As the global cryptocurrency landscape continues to evolve, the interplay between international regulatory developments and domestic policies will be pivotal for both China and India in the digital economy. Analysts warn that without a proactive strategy, both nations risk losing their competitive edge in this rapidly growing sector [07f551ff].