A CPPCC Member Proposes To Launch A Regulated Cryptocurrency Exchange In China
As Chinese authorities escalate crackdown on cryptocurrency trading, a member of China’s top political advisory body, however, suggested on March 3 that a regulated and efficient cryptocurrency exchange should be set up in China under unified coordination of various government agencies to help companies raise funds and to assist individual investors to receive capital gains.
China kicked off the annual parliamentary season on last Friday. Wang Pengjie, member of the 13th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), brings his proposals to Beijing to fulfill his duty as “a representative of his industry”.
Surprisingly, Wang’s proposal of this year focuses on blockchain and cryptocurrency, a rare issue would be raised by China’s political advisers before. But it can also reflect the fact that cryptocurrency and blockchain fever is heating up in this country now.
“As of early January 2018, the market capitalization of all cryptocurrencies excluding bitcoin, ethereum has surpassed China’s largest Internet company Tencent. ” Wang explained the background of his proposal, “Riding the cryptocurrency wave, countries like Japan and South Korea have enacted a series of decrees and measures, and taken a clear stance on many issues, including the trading and holding of digital assets, and taxes on crypto profits. Nasdaq, for example, plans to introduce bitcoin futures in the first half of this year, becoming the third U.S. exchange to offer cryptocurrency derivatives.”
However, as a late starter in developing blockchain, China has to face harsh realities. Then, the member of CPPCC raises three thorny issues:
First, the lack of mature Independent Intellectual Property Rights(IIPR) and widely-accepted digital assets is not good for China’s financial security in the long run;
Second, a swath of domestic internet companies such as Xunlei(NASDAQ: XNET), Baofeng, ChinaNet Online Holdings, Inc.(NASDAQ:CNET) are in a race to develop decentralized applications and launch their own tokens. But significant legal uncertainty around such digital assets could shake companies’ confidence to expand blockchain business and sap their creative vitality.
Third, common consumers grasp little knowledge of blockchain assets and fail to recognize their pros and cons. So this group of people are easily tricked into sending money to cryptocurrency scammers, causing huge potential losses.
Against this backdrop, Wang proposes to create an “ approval system” for cryptocurrency projects, to introduce real-name verification measures for traders and educate citizens about blockchain and cryptocurrency.
“We must explore to establish a digital asset trading platform at the national level.” Wang Pengjie suggested, “ Based on a solid legal framework , a regulated and highly efficient cryptocurrency trading platform should be built under the unified cooperation of relevant government agencies such as the People’s Bank of China(PBOC) and The China Securities Regulatory Commission(CSRC).Thus we can provide a formal channel for companies to raise funds and for individual investors to achieve capital appreciation.”