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China’s BSN chair calls Bitcoin Ponzi, stablecoins ‘fine if regulated’

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Amid the Chinese authorities persevering with to rejoice the large decline of cryptocurrency markets this yr, one key native blockchain professional has referred to crypto as a Ponzi scheme.

Yifan He, CEO of Red Date Technology — a significant tech agency concerned within the growth of China’s main blockchain undertaking referred to as the Blockchain Service Network (BSN) — has penned a brand new article devoted to varied sorts of cryptocurrencies and their supposed Ponzi-like nature.

Published within the native newspaper The People’s Daily on Sunday, the piece refers to non-public cryptocurrencies because the “biggest Ponzi scheme in human history.”

The creator talked about the Terra community’s collapse, with the native token Terra (LUNA) — now generally known as Luna Classic (LUNC) — crashing 99% and the algorithmic TerraUSD Classic (USTC) stablecoin dropping its 1:1 peg worth to the United States greenback in May 2022. He additionally criticized the more and more common digital forex idea generally known as X-to-earn, referring to move-to-earn or play-to-earn initiatives, calling the mannequin a “phishing strategy.”

The BSN chair additionally talked about some well-known criticism of Bitcoin (BTC) by Microsoft founder Bill Gates and legendary investor Warren Buffett.

He will not be a fan of Bitcoin or any related cryptocurrencies himself as properly. “Currently, all unregulated cryptocurrencies including Bitcoin are Ponzi schemes based on my understanding, just different risk levels based on the market caps and number of users,” He stated in an announcement to Cointelegraph on Monday.

The BSN chair added that he had not had any cryptocurrency pockets or associated property ever: “I don’t touch them and won’t touch them in the future even if they become regulated because I don’t consider that they have any value whatsoever.”

According to He, governments like El Salvador — which opted to undertake BTC as authorized tender — “seriously need basic financing training.” “Otherwise, they put entire countries at risk unless their original intentions were to build state-owned crypto trading platforms and scam off on their citizens,” the exec informed Cointelegraph.

While criticizing Bitcoin and plenty of different crypto initiatives, He nonetheless believes that some a part of the crypto market might be doing simply high quality if it’s correctly regulated. Cash-backed stablecoins like Tether (USDT) and Circle’s USD Coin (USDC) shouldn’t be seen as Ponzi-like schemes, the BSN chair stated, stating:

“USDC or USDT are payment-related currencies, not speculative assets. Once they are fully regulated, they are fine.”

He beforehand talked in favor of stablecoins in 2020. The govt as soon as deliberate to combine stablecoin funds into BSN as of 2021. The plan was ultimately scrapped attributable to China’s hostility to crypto.

Related: China warns Bitcoin is heading to zero however BoE seems to be on the intense facet

The information comes amid the Chinese authorities capitalizing on the continuing crypto market crash to justify its a number of bans on the business. The newest coordinated ban was enacted in September 2021, with a number of Chinese authorities taking motion to ban all types of crypto transactions within the nation.

Despite all efforts, China continued to be a dominant Bitcoin mining provider worldwide. According to knowledge from the Cambridge Bitcoin Electricity Consumption Index, China was the second largest BTC mining hash fee producer after the United States as of January 2022.