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China’s Bank Regulator Propose Cryptocurrency Activities Under Regulation

A working paper recently published by the China Banking Regulatory Commission (CBRC) is dedicated to the legalization and regulatory studies on cryptocurrency-related activities.

The paper, titled The Study of Development and Regulations on Distributed Ledger Accounts, Blockchain and Digital Currency, is a research report from researchers at the CBRC, focusing on regulatory studies on cryptocurrency and initial coin offerings with an overview of global situations.

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The paper points out that

“Any transaction and settlement related to distributed ledger accounts, blockchain, cryptocurrency and their derivatives, ICOs and exchanges operations shall all be regarded as legal financial services. Therefore, they shall be put under corresponding financial regulatory frameworks and operate legally with a license.”

In view of the rapid development of fintech sweeping the world, the paper suggests regulators follow the technology-neutral principle and protect fair competition in the market. To prevent illegal financial activities in the name of “blockchain technology”, regulators are advised to give a “penetrating” definition of those fintech services, as well as regulations and guidance over it in time.

Although the paper indicates that comments made by researchers do not necessarily represent the views of the regulator itself, the suggestion is quite eye-catching as it is for the first time that Chinese regulators advocated for a cryptocurrency licensing scheme which has been adopted in the U.S.

Offering comparisons of regulations over crypto-related activities between China and other countries in the world, the paper is making efforts to put the has-been-banned cryptocurrency and ICO back on the agenda.

It comes days after the country’s central bank was revealed to have filed blockchain patents for digital currency wallet, which symbols the country is well prepared for the launch of state-backed digital currency.

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