06.12.2021

Poland’s financial regulator worries about Binance, while Chinese bankers criticize stablecoins

The Polish Financial Conduct Authority (PFSA) issued a statement on Binance’s growing regulatory concerns around the world, highlighting that the company is not regulated in Central Europe.

As the representatives of the organization noted, the crypto market is “not subject to supervision” by the PFSA, and trading in cryptocurrencies on the Binance platform itself is associated with significant risks. The flow of negative news for the cryptoindustry did not end there: this time, the central bank of China also started talking about the “danger” of stablecoins.

Cryptocurrencies are criticized regularly, and this has been especially noticeable lately. In particular, representatives of the Swiss bank UBS campaigned against the connection with decentralized digital assets this week.

As they noted in their address to clients, financial regulators can allegedly “burst the cryptocurrency market like a bubble”, which should eventually affect the rates of various coins.

Now, representatives of the Polish financial regulator expressed concern about what is happening within the cryptocurrency industry. In addition, the negative about the niche was voiced by representatives of China.

What cryptocurrencies are criticized for

It is noteworthy that criticism from the PFSA was voiced almost simultaneously with the publication of an open letter from Binance CEO Changpeng Zhao. In it, we recall, the entrepreneur called on the world to more precise regulation of the industry. According to him, in this way, the niche of digital assets will develop much faster. In addition, fewer investors will be afraid to get involved with crypto, which will also affect the pace of popularization of coins.

Here is a quote from the regulator’s statement on the state of affairs regarding the exchange, in which its representatives share their concerns about the operation of the platform. The statement is quoted by Cointelegraph.

In line with the protection of financial market participants and warnings from foreign supervisors, the PFSA office recommends that special caution be exercised when using the services of the Binance group organizations and trading cryptocurrencies, as this can entail significant risks that can lead to loss of funds.

The PFSA mentioned several regulatory warnings against Binance from global regulators – including those issued by the German Federal Financial Supervisory Authority, the UK Financial Conduct Authority, the Cayman Islands Monetary Authority, and the Thai Securities and Exchange Commission .

Not only Binance was under the yoke of criticism, but the entire stablecoin ecosystem. True, this time the negative followed from China, where the massive migration of miners began relatively recently against the backdrop of new government bans.

Fan Yifei, deputy governor of the People’s Bank of China (PBOC), expressed concern about the allegedly serious threat of stablecoins like Tether USDT to global financial and settlement systems. The official stressed that the pace of development of private payment systems is “very alarming” and that the NBK is working against monopolies and “indiscriminate capital increases. Here is his line.

The so-called stablecoins of some commercial organizations – especially global stablecoins – can bring risks and problems to the international monetary system, payment and settlement infrastructure.

Note that in the case of USDT and other popular stablecoins, the right to issue cryptocurrencies belongs to private companies, not the state. In this regard, it is not difficult to understand the reasons for criticism from the country’s leadership.

Central People's Bank of China

Central Bank of China

The crypto market reacted to everything that happened with a sluggish decrease in the price of BTC and a fall in most altcoins. At the same time, Bitcoin is still balancing above the $ 30 thousand line .

The total industry capitalization is $ 1.41 trillion, down 1.3 percent from a day ago. The graph of the indicator in 2021 looks like this.

cryptocurrencies chart capitalization

Market capitalization chart in 2021

At the same time, the level of dominance of Bitcoin – that is, its share in the market capitalization of the entire niche – is equal to 43.6 percent. The corresponding figure for Ethereum is 17.2 percent.

We believe that in the long term, such statements and criticism will not affect the cryptocurrency industry in any way. Serious development awaits the niche, the possible pace of which has already been demonstrated by the sphere of decentralized finance in the summer of 2020 and unique NFT tokens in the spring of 2021.

In addition, the Chinese government has repeatedly “banned” the circulation of cryptocurrencies, the operation of exchanges and the activity of companies that are associated with transactions with digital assets. Despite this, the niche withstood the blows and then set new price records. Obviously, this time will not be an exception.

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