China’s crypto crackdown isn’t just about Bitcoin mining – stablecoins, software, and influencers are on its radar too

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China’s crackdown on cryptocurrencies doesn’t seem to end with the ban on bitcoin mining. The Asian giant’s central bank is also laying the hammer when it comes to services related to crypto and other cryptocurrencies, especially stablecoins like Tether. The country appears to be worried about its financial stability and the threat that stablecoins could pose if there is enough adoption. China’s crackdown on cryptocurrencies is unlikely to end with Bitcoin mining. Authorities in the country have indicated that other digital tokens, especially stablecoins, also pose a serious threat.

The so-called stablecoins of some trade organizations, especially global stablecoins, can present risks and challenges to the international monetary system, payment and settlement system, etc.

Fan Yifei, vice-governor of the People’s Bank of China, told reporters on July 8.

With China’s financial stability in question, cracking down on cryptocurrency is seen as a way to contain one of the potential sources of instability. And, the People’s Bank of China isn’t the only central bank that doesn’t trust digital currencies.

The Reserve Bank of India (RBI), the United States Treasury, the Reserve Bank of South Africa and others are also warning citizens to beware of the risk of cryptocurrencies.

What’s China’s problem with stablecoins?

Stablecoins aren’t like your normal cryptocurrencies – they don’t get their value from the number of verified transactions. Instead, they derive their value from external referrals. It can be a currency like the US dollar or a commodity like gold.

However, as cryptocurrencies are still in their infancy, there is a certain lack of transparency. Dollar-based Tether has been accused – on several occasions – of not having the funds to back up its claimed holdings. And, he has also been accused of manipulating the price of Bitcoin.

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Global stablecoins, if adopted by enough people, can not only impact the economy, but also have the power to influence a country’s monetary policy.

China’s Crypto War Far From Over Just days ago, regulators asked a software maker called Beijing Qudao Cultural Development to shut down over allegations of cryptocurrency trading. This move is seen as a wake-up call for other Chinese companies to stay away from crypto trading or offer crypto-related services.

Crypto influencer accounts on Weibo were also closed for violating platform guidelines and Chinese laws last month. According to the People’s Bank of China, the action was necessary to “prevent and control the risk of speculation in virtual currency transactions”.

All of this and more has happened since the end of May, when China launched a nationwide call to crack down on Bitcoin mining and transactions. With the country’s miners accounting for more than half of the world’s mining volume, Bitcoin’s hash rate – the speed at which transactions are verified – has plummeted as miners try to find new jurisdictions to set up operations.

Now, investors and crypto players are eagerly waiting to see where the Asian giant’s regulators strike next.

For a more in-depth discussion, head over to Business Insider Cryptosphere – a forum where users can delve into all things crypto, engage in interesting discussions, and stay ahead of the curve.

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