China’s New Central Bank Governor Announces Tough Measures on Cryptocurrency Speculation and Financial Stability

In a significant address at the sixth meeting of the Standing Committee of the 14th National People’s Congress, Pan Gongsheng (潘功胜), the Governor of the People’s Bank of China, delivered a comprehensive “Report on the Financial Work of the State Council” on October 21, 2023. The report outlined a series of key points and strategic measures aimed at maintaining financial stability, promoting economic recovery, and preventing risks within the Chinese financial sector.

The most notable aspect of this report is the strong stance taken against cryptocurrency speculation within China. Governor Pan Gongsheng made it clear that the Chinese government is determined to resolutely halt the speculation of cryptocurrency transactions in the country. This announcement aligns with China’s long-standing stance on cryptocurrencies, where authorities have previously banned Initial Coin Offerings (ICOs), closed cryptocurrency exchanges, and issued warnings against crypto trading.

Pan Gongsheng

Furthermore, the governor emphasized the need to crack down severely on illegal fundraising and money laundering activities. The Chinese government has been vigilant about illicit financial activities, and this renewed focus on combating such practices underscores their commitment to maintaining a clean and secure financial ecosystem.

In a bid to maintain stability while fostering economic progress, Governor Pan Gongsheng outlined six key points in the report:

  1. Prudent Monetary Policy: China will continue to implement a prudent monetary policy, with a focus on fine-tuned control, ensuring that broad money supply growth aligns with nominal economic growth rates.
  2. Strengthened Financial Supervision: The government is actively working to improve modern financial supervision, enhance the ability of finance to serve the real economy, and promote the stable operation of financial markets.
  3. Financial Reform and Opening Up: The report underscores the importance of deepening financial reform and expanding financial markets’ access to international players. This reflects China’s commitment to global financial integration.
  4. Prevention of Financial Risks: The Chinese government is committed to preventing and resolving financial risks, especially in small and medium-sized financial institutions. Measures to address non-performing assets and risk reduction are underway.
  5. Support for the Real Economy: Financial institutions are encouraged to provide ample financing to support key sectors, including manufacturing and technology-based small and medium-sized enterprises, to facilitate economic growth.
  6. Legal Framework and Anti-Corruption: The report places significant emphasis on financial rule of law, and it is committed to severely punishing financial corruption. The regulatory framework will be improved to ensure proper oversight.

The report further stresses the importance of guiding and stabilizing financial market behavior and expectations. The central bank will take timely measures to prevent risk contagion in stock markets, bond markets, and foreign exchange markets, all while maintaining the stable operation of the financial market.

This comprehensive report highlights the Chinese government’s commitment to maintaining financial stability, preventing risks, and furthering economic growth. It is clear that the new central bank governor, Pan Gongsheng, is intent on addressing the evolving financial landscape and is unyielding in enforcing policies to ensure China’s financial system remains secure and reliable.

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