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Bank Accounts are Banned to Facilitate Cryptocurrency Trade, An Official From China’s Regulator Says

In the recent interview, Chen Weigang, an official from China Banking and Insurance Regulatory Commission elaborated on the current focus on crypto scam crackdown and the upcoming Chinese digital fiat money DCEP.

In order to protect the interests of consumers, three kinds of bank business are prohibited. The first is to prohibit banks from directly or indirectly deliver funds to false and illegal blockchain investment targets. It is required that the investment company with bank holding must be investigated whether to maliciously hype the concept of blockchain or engage in illegal business such as ICO before borrowing.

Second, banks cannot provide payment, transfer channels and transaction accounts for projects that are illegally funded in the name of “cryptocurrency” or “blockchain”. Funds from cryptocurrency speculation are banned to be transferred into the bank account.

Third, the bank’s financial technology innovation is responsible for preventing blockchain hype. Banks can make use of blockchain technology, but before application, it is necessary to fully evaluate whether the technology conforms to business logic and the level of risk control to protect consumers’ rights and interests.

“After running DCEP, the operation system of commercial banks will be more complex, that is to say, under the original system, a new DCEP system will be added. Each business needs to add a new device to receive the money from the electronic wallet, which is a device system that can pay and receive offline, and directly carry out point-to-point operation with customers.”

When it comes to DCEP, Chen thinks every coin has two sides, from the perspective of development, it must be getting better and better. In terms of security, e-wallet is much higher in confidentiality than bank card, besides password, it boasts biometric identification technology such as fingerprint, face brushing, iris, voice, which can better judge whether it is used by itself. If lost, the password can be cracked, and the thief can be found because the money in the electronic wallet has an ID.

Chen believes that blockchain can improve the risk control ability of banks as the core value of blockchain is to establish a better trust mechanism. By synchronizing the data related to asset management products with blockchain, consumers can clearly trace each sum of money. Therefore, blockchain technology protects financial consumers and investors.

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