According to China’s local news outlet, Lie Yun Wang reported on March 3, the creation of a national cryptocurrency exchange and other regulatory systems at one of the two annual sessions of country’s top legislative and advisory bodies was proposed by a member of China’s top political advisory board.
Wang Pengjie, a member of the Chinese People’s Political Consultative Conference (CPPCC), proposed that the People’s Bank of China (PBOC) and China Securities Regulatory Commission (CSRC) should build up a Blockchain and digital asset management “approval system”, and raised the possibility of setting up a digital asset trading platform at a national level.
These remarks follow the recent string of crypto bans from China, from blocking foreign exchanges to the ban of Initial Coin Offerings in September 2017.
Pengjie referred to the increasing total market capitalization of cryptocurrencies like Ethereum, Bitcoin, and Litecoin, pointing out that their market caps exceeds that of Tencent, China’s biggest Internet provider, in January 2018, as a reason for the country to watch out the Blockchain-based technologies. Also, South Korea’s cryptocurrency regulations, the intention of NASDAQ to trade in Bitcoin futures, and other impetuses were discussed by Pengjie.
Regarding the problems that Blockchain bring to the country, Pengjie stated that the “lack of mature independent intellectual property rights […] will not be good for China’s financial security in the long run.” Also, he referenced the lack of clarity regarding the cryptocurrency legal status and the lack of consumer knowledge that could “easily” lead to fraud by “unscrupulous elements dressed in “Blockchain” garments, causing serious economic losses.”
According to Pengjie, the creation of the above mentioned “approval system” and the application of a “real name” system certification in conjunction with experienced educating investors on Blockchain and virtual currencies could be a solution to these problems.
The establishment of a National Blockchain digital asset trading platform, jointly regulated by the PBOC and CSRC was suggested by Pengjie.
“Thus we can provide a formal channel for companies to raise funds and for individual investors to achieve capital appreciation.”
In November 2017, the CSRC signed a deal of financial technology cooperation with Australia, aiming at promoting FinTech innovation between the two countries. However, the PBOC’s ban on foreign cryptocurrency exchanges and the exchange-like services restrictions led partially to Bitcoin dipping below $7,000 in February.