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China warns stablecoins are a risk to global financial systems

Digital currencies tied to gold and dollar are used in crime, central bank says

The value of stablecoins is pegged to a reserve asset like the dollar or gold. They are attractive to investors because, in theory, their value is less volatile than bitcoin and other cryptocurrencies.   © Reuters

China's central bank warned that stablecoins, a type of digital currency, pose serious risks to global financial systems, while stressing that China's digital yuan doesn't have the problems.

Digital currencies issued by private institutions, including stablecoins, have become speculative tools that threaten financial security and social stability, and have become used as payment for illegal activities and money laundering, Fan Yifei, deputy governor of the People's Bank of China, said at a press briefing Thursday.

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