China central bank urges the world to jointly regulate crypto
The People's Bank of China (PBoC) has addressed issues related to regulation of cryptocurrencies and decentralized finance (DeFi) in its latest financial stability report.
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The Chinese central bank devoted a separate section to cryptocurrency assets in its new financial stability report, alerting the need to regulate the industry using joint efforts by different countries.
According to local industry journalist Colin Wu, PBoC’s latest financial stability report has mentioned crypto assets for the first time ever and called on the governments to apply the approach of “same business, same risks, same supervision” to avoid regulatory arbitrage.
The report referred to a number of potential risks stemming from cryptocurrency regulatory arbitrage, referring to vulnerabilities to hacker attacks, market manipulation and concerns related to DeFi government mechanisms. The PBoC specifically mentioned collapses of the Terra ecosystem as well as the FTX exchange collapse, urging the need to manage regulatory fragmentation and eliminate supervision arbitrage.
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