More information on the developments in China have been coming out recently, concerning the new regulations of Chinese bitcoin exchanges. On March 9th, Wu Xiaolin, the former deputy governor of the People’s Bank of China (PBOC) and congresswoman for the National People’s Congress, told a local reporter the central bank should be responsible for these types of bitcoin trading platforms.
Chinese Congresswoman Says ‘Bitcoin Is a Successful Application of Blockchain Technology’
According to Wu Xiaolin, the PBOC should be in charge of regulating bitcoin exchanges because the businesses involve certain aspects of anti-money laundering (AML), foreign currency management, and payment settlement. Wu explains the recent inspections were needed, so bitcoin is not a tool used for money laundering purposes. The congresswoman also states she hopes the bitcoin exchanges within the country are compliant with the new regulatory policies. However, she expressed bitcoin exchanges have so far been very cooperative and have carried out self-examinations.
“Bitcoin is a relatively successful application of blockchain technology,” details the translated commentary from congresswoman Wu Xiaolin. “Now different governments and regulators have different options on bitcoin. In China, we defined it as a digital asset. There are other countries considering it as a decentralized currency without legal compensation characteristics.”
The Central Bank Encourages the Development of Financial Technology
Wu has spoken about bitcoin many times in the past once stating the digital currency should be regulated but not banned. Moreover, the congresswoman has said the existence of bitcoin and government issued virtual currencies can coexist. Wu and some of her colleagues seem to have little issues with bitcoin as long as it is monitored.
Meanwhile, the PBOC Governor Zhou Xiaochuan has also made recent statements concerning China’s vision towards financial technology.
“The central bank highly encourages the development of financial technology,” explains Xiaochuan. “Digital currency, blockchain, and other technologies will have an unpredictable impact. In the development process, the problems encountered needs to be regulated.”
U.S. State Department is Monitoring China’s Regulatory Efforts Towards International AML Standards
Alongside the recent PBOC inspections, the U.S. State Department released a report written by the International Narcotics and Law Enforcement Affairs (INLEA) concerning China and many other countries’ financial regulation enforcement strategies. The INLEA report gives a very detailed overview of the recent PBOC regulatory crackdown on the Chinese financial sector. The statements made seems to imply the U.S. government hopes China continues to make improvements to its AML legal and regulatory framework towards underground financial systems and digital currencies.
“China should cooperate with international law enforcement to investigate how indigenous Chinese underground financial systems, virtual currencies, and trade-based value transfer are used for illicit outbound transfers, and to receive inbound remittances and criminal proceeds,” the INLEA report concludes.
Chinese regulators, politicians, and PBOC executives are indeed applying great attention to financial regulation enforcement with bitcoin businesses and many other types of monetary exchange operations.
What do you think about the recent PBOC crackdown to better enforce regulations? Let us know in the comments below.
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Chinese Congresswoman: ‘PBOC Should be Responsible for Bitcoin AML’