Chinese officials have warned activists of possible dangers in the area, calling for stricter regulation of digital currencies.
to the the report Cryptopotito, Chinese officials have warned people about the dangers of digital asset transactions, citing fraudulent transactions, security breaches and illegal and criminal activities related to digital currencies as the three main dangers in the space.
Investors need to be more vigilant when working with Bitcoin and other digital assets, according to China Financial Stability Report. Officials at China Securities Corporation have called for better regulation in this area, citing three major risks involved in trading these assets.
According to Chinese officials, the first risk is that digital assets are highly decentralized, meaning they do not have legal oversight and protection. According to the publication, this is a major weakness and can lead to price manipulation and fraudulent transactions.
Second, the price of most digital currencies, including bitcoin, can easily become a tool for trading and fluctuate sharply.
A third risk, according to Chinese officials, is that it is difficult to monitor the transfer of funds on China’s blockchain technology, and this can create a great environment for money laundering.
In addition, illegal and criminal activities are likely to grow in this situation, as offenders have the opportunity to conduct drug or arms transactions in digital currencies.
Chinese officials have advised the digital currency community to be vigilant to avoid these risks, especially since there is no legal way to trade digital currencies and no legal protections in China.
When you are in danger, you can only bear the consequences. In short, trading currencies is dangerous and you should be careful if you enter this market.
Despite the Chinese government’s stance against bitcoin, the digital currency is very popular in the country and many of its miners are based in the Asian country.
The People’s Bank of China recently announced that it is considering bitcoin as an alternative investment. Zhou Xiaochuan, former chairman of the People’s Bank of China, spoke about the potential of digital assets and their future implementation, but acknowledged that digital currencies may not be used for illegal activities such as drug or arms trafficking or gambling. Or do not use money laundering.
We believe that digital assets, either as an investment tool or as an alternative investment, should play a major role in the future. Many countries, including China, are studying them as an investment tool.