China's BSN calls Bitcoin a Ponzi; stablecoins fine if regulated

Chinese financial regulator BSN said stablecoins are payment-related tokens and not speculative assets

  • Published:
  • 28/06/2022 05:28 PM

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Yifan He, CEO of Red date Technology and a top local blockchain expert, referred to Bitcoin as a Ponzi scheme as the Chinese government continues to revel in the downfall of crypto markets this year.

Red Date Technology is involved in developing the Blockchain Service Network (BSN), China's largest blockchain project. Its CEO, Yifan He, wrote a new article recently criticising several cryptos and their alleged nature like a Ponzi scheme. The article, published in the local newspaper The People's Daily on June 26, referred to private crypto as the "biggest Ponzi scam in human history."

The article also talked about the Terra network's collapse, with the native token Terra (LUNA) dropping 99 percent and the algorithmic TerraUSD Classic (USTC) stablecoin losing its 1:1 peg value to the US dollar in May 2022.

Yifan also referred to the Move-to-Earn or Play-to-Earn initiatives, sometimes known as "X-to-Earn" projects, as a "phishing method" and questioned the growing popularity of virtual money. The BSN chairman also mentioned well-known Bitcoin (BTC) critics such as Microsoft co-founder Bill Gates and renowned investor Warren Buffett.

While making a statement regarding the matter on Monday, he stated, "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." 

The BSN chair also added that he has never had a crypto wallet or other crypto-related assets. He said, "I don't touch them and won't touch them in the future, even if they become regulated, since I don't believe they have any value."

In his statement, Yifan also talked about nations such as El Salvador, which has chosen to use Bitcoin as legal cash. As per him, these nations "seriously need basic financing training." 

He added, "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."

Notwithstanding the criticism levelled up against Bitcoin and the crypto industry in general, Yifan added that some aspects of the crypto industry could thrive if properly controlled. He said, "USDC or USDT are payment-related currencies, not speculative assets. Once they are fully regulated, they are fine."

Yifan previously advocated for stablecoins in 2020. The CEO had previously planned to integrate stablecoin payments into BSN by 2021. Due to China's harsh rules for crypto, the initiative was subsequently abandoned.

The article was posted around the same time as the Chinese government using the ongoing crypto market fall to justify its numerous prohibitions on the industry. Despite the bans, China remains one of the leading countries in supplying equipment required for Bitcoin mining.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash