The People's Bank of China spoke about the risks of cryptocurrencies for Chinese citizens

The Central Bank of China has released a report outlining the risks associated with cryptocurrencies and their impact on the country’s citizens. The report highlights the decentralized nature of digital assets as a dual risk – both financial and technological. The lack of clear regulatory rules further exacerbates these risks. The Central Bank cautions that crypto assets can be used for illegal activities and are prone to volatile exchange rates and liquidity issues. The absence of a mechanism for adjustment in the presence of “negative feedback” poses a threat to the stability of cryptocurrencies. The report also mentions the security vulnerabilities of blockchain-to-blockchain interactions, leading to potential cyber attacks and market manipulation. Additionally, the anonymous nature of cryptoassets hinders law enforcement efforts and the return of funds to rightful owners. Chinese officials have called for increased international regulatory oversight to protect users from fraud and financial loss in the crypto industry.