Nation to boost digital economy regulatory oversight
The nation will beef up its regulatory oversight of the digital economy, as new technologies, especially new forms of finance, should not be blindly accepted and recognised, a deputy governor of the central bank said on Friday. Digital currencies and newly invented cryptocurrencies, rather than solving problems in finance, can in fact create new challenges, Xuan Changneng, a deputy governor of the People's Bank of China, said at the Boao Forum in Hainan. He did not spell out steps that will be taken to boost oversight. "The digital economy has changed the format of financial services, but it has not changed the financial model itself," Xuan said. Cyclical swings in the sector, micro credit risks and liquidity risk mismatches "still exist", he said. In recent years, mainland regulators have increased scrutiny over the fintech sector as part of a broader campaign to fend off financial risks. "Cryptocurrencies lend themselves to risks relating to fraud and unlawful transactions," Xuan said, adding that the United States had "failed" at regulating cryptocurrencies. On Thursday, US Treasury Secretary Janet Yellen said the Biden administration is continuing to study the potential for systemic risks from digital assets, an effort that began before the collapse of cryptocurrency exchange FTX. (Reuters)