It is not unknown to people who closely follow all the digital currency updates that China has always been stricter when it has come to cryptocurrency, having banned digital currency exchanges, ICOs, trading, and more in the previous years. The recent news, however, has again brought to the forefront of the country’s interest in regulating crypto.
The country has launched the latest anti-anonymity regulations for enabling organized developments in the Chinese blockchain field. While the regulations are still being made, it seems these developments will let the government enjoy the firm control.
As per one of the news outlets in China called Securities Daily, the Chinese political advisors, and legislative delegates are asking for crypto regulations that are both strict and clear during the country’s biggest and on-going annual political meet “Two Sessions”.
Is China on its way on passing crypto administration?
Going by the statement of NPC’s deputy, China’s legislator as well as Shaanxi Rongmin Holdings Group’s chairman, Shi Guilu, it is extremely important to formulate a comprehensible regulatory framework applicable for digital currencies. He also stated the need to legally form the framework ASAP.
Guilu has also submitted a plan to the ongoing session of NPC where he has suggested the Chinese Law describes digital currencies like BTC as a form of non-fiat currency.
His proposal also suggests that digital currencies should be regarded differently from the fiat currencies and cryptocurrency trading exchanges must inform the users that such virtual money is different from the fiat one. It is being done as an effort to spread awareness in the public and to refrain them from making unreasonable virtual money investments.
Guilu further said, there are many criminals around who start illicit fundraising scams in the name of crypto and blockchain to attract innocent investors. In addition, he also dislikes the concept of digital currencies being attached to a fiat currency, for instance, Renminbi. According to Guilu, this can cause a problem as the digital currency has zero limitations in terms of issuance which in turn could possibly skew fiat currencies’ issuance.
It is due to all these reasons that Guilu is advocating the Chinese government to formulate stringent regulations on the crypto market.
The Framework is the Need of the Hour
Guilu is not standing alone in favour of an effective regulatory framework on crypto. Gong Fuwen, one of the CPPCC members, seconds his thoughts as well.
His proposal reads, “Digital tokens are different from the digital currency issued by the central bank and cryptocurrency trading should be totally banned to prevent financial risks.”
Additionally, Fuwen also suggests that if a digital token is acquiring funds through ICO then it should be administered as a private equity security. He also stated that there should be prevention on creating hype for such projects and they should only rely on blockchain and crypto concepts for the sale of their product.
To look at it whole, it is clear that the government of China is firm on making the crypto space in the country free from frauds and scams in the best way it can.