A member of China’s top political advisory board has proposed the creation of a national cryptocurrency exchange and other regulatory systems at one of the two annual sessions of China's top legislative and advisory bodies, local news outlet Lie Yun Wang reported on March 3.
Wang Pengjie, а member of the Chinese People’s Political Consultative Conference (CPPCC), suggested that the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC) should create a Blockchain and digital asset management “approval system,” as well as raised the possibility of establishing a digital asset trading platform at a national level.
Pengjie’s remarks come after a recent string of crypto bans from China, from blocking foreign exchanges to the September 2017 ban of Initial Coin Offerings (ICO).
Pengjie brought up the rising total market capitalization of digital assets like Ethereum (ETH), Bitcoin (BTC), and Litecoin (LTC), noting the fact that their market caps exceeded that of China’s biggest Internet provider Tencent in January 2018 as a reason for China to pay attention to Blockchain-based technologies. He also mentioned South Korea’s crypto regulations, and the fact that the US Nasdaq is considering trading in Bitcoin futures as other impetuses.
Pengjie did mention the issues that working with Blockchain brings up for China, first stating that the “lack of mature independent intellectual property rights [...] will not be good for China's financial security in the long run.” He also referenced the lack of clarity surrounding the legal status of cryptocurrencies as well as the lack of consumer knowledge that could “easily” lead to fraud by “unscrupulous elements dressed in 'Blockchain' garments, causing serious economic losses.”
A possible solution to these problems, according to Pengjie, is the creation of the aforementioned “approval system,” as well as implementing a “real name” system certification in conjunction with thoroughly educating investors on Blockchain and virtual currencies.
Pengjie also suggested establishing a national Blockchain digital asset trading platform, jointly regulated by the PBOC and CSRC:
“Thus we can provide a formal channel for companies to raise funds and for individual investors to achieve capital appreciation.”
The CSRC had signed a deal of financial technology cooperation with Australia in November 2017, aimed at promoting fintech innovation between the two countries. The PBOC’s ban of foreign cryptocurrency exchanges, on top of the other ICO and “exchange-like service” restrictions, in part led to Bitcoin dipping below $7000 in early February, for the first time since November 2017.
By Molly Jane Zuckerman