China SAFE Official Stresses the Need to Track and Analyze the Influence of Cryptocurrencies on Capital Movements

A top official from China's State Administration of Foreign Exchange (SAFE), Li Bin, emphasized the agency's commitment to strengthening its ability to track and analyze the influence of cryptocurrencies on capital movements.

A top official from China's State Administration of Foreign Exchange (SAFE) has disclosed the agency's focus on strengthening its capabilities to track and analyze the impact of cryptocurrencies on capital flows.

Speaking at a Boao Forum for Asia panel discussion on Friday, discussing monetary stability in the new era, Li Bin, an official from SAFE's Foreign Investment Department, highlighted the importance of deeper research.

"We will continue to conduct in-depth research on the role of new technologies, such as Web3, blockchain, and crypto assets, in cross-border financial transactions and capital flows," Li stated.

He added that SAFE is committed to continuously improving its monitoring techniques to better understand the evolving dynamics of capital movements.

This insight into SAFE's agenda comes amid a period of heightened scrutiny by Chinese authorities over the cryptocurrency sector.

Despite the stringent policies imposed by the Asian nation on crypto trading and mining, officials have signaled their intent to integrate digital assets into the broader financial system.

Earlier this year, an influential state-run news agency discussed the potential of cryptocurrencies to diversify investment channels and serve as a hedge against inflation.

China's capital controls aim to limit the dollar's role in internal transactions. However, large-scale capital outflows in 2015, amid a stock market crash and economic slowdown, sparked concerns about capital flight.

These worries have been renewed following a significant increase in U.S. interest rates, which could induce investors to withdraw their funds from the Chinese market.

China implemented a ban on cryptocurrency trading in 2017, later renewed in 2024, and imposed a crackdown on mining in 2021.

These measures have led to the relocation of large-scale mining operations, previously concentrated in China's southwest, to other destinations, including the United States, Kazakhstan, and Canada.

Despite the restrictions, individual investors have found ways to access offshore exchanges and decentralized finance platforms, keeping crypto trading activity afloat even as domestic regulations become increasingly strict.