China has announced plans for government reform that includes the introduction of a new national financial regulator. On Tuesday, March 7, the government announced that it would abolish the China Banking and Insurance Regulatory Commission (CBIRC) and transfer its responsibilities to a new administration. This move is part of a broader reform agenda for state and party institutions in China that was called for by the country’s President Xi Jinping.

The new financial regulator will “strengthen institutional supervision, behavior supervision and function supervision,” according to the plan. It will take over some functions of the central bank and the securities regulator. The legislature will vote on the institutional reform plan on Friday, March 10.

Currently, China’s financial industry is under the supervision of the People’s Bank of China (PBOC), the CBIRC and the China Securities Regulatory Commission. There was no specific mention of reforms for the crypto industry in the announcement.

However, in February, a former PBOC adviser called on Beijing regulators to reconsider their harsh ban on cryptocurrencies. In 2021, China banned almost all crypto transactions, but the government has spent millions developing its own central bank digital currency (CBDC), the digital yuan.

One of the most recent updates to the digital yuan project was the addition of new smart contract functionality and new use cases, including buying securities and offline payments. China also announced the establishment of the National Blockchain Technology Innovation Center in February, a state-backed institution that aims to accelerate the country’s industry through blockchain technology.

The new regulatory framework is expected to improve supervision and streamline the financial sector in China. The consolidation of regulatory responsibilities into a single agency could also lead to greater efficiency and better coordination in the regulation of financial activities.

Overall, China’s government reform and the introduction of a new financial regulator signal the country’s commitment to strengthening its financial system and ensuring future financial stability.