Chinese Scholar: China Should Regulate Cryptocurrency Like Thai, Japan and the United States
The attribute of cryptocurrency has always been an issue causes controversy. Since the People’s Bank of China imposed a ban on local and foreign cryptocurrency exchanges and ICOs in last September, there have been contradictory signals about the future regulation of cryptos in China.
Hu Jiye, the vice president of the Internet Finance Law Research Institute of the Beijing Law Society and the professor of finance at the China University of Political Science and Law (CUPL), suggested that China should learn from other countries, such as Thailand, Japan and the United States of how they will regulate cryptocurrencies.
Hu said in an interview that Thailand has passed an entirely new law defining digital assets as both currencies and securities which depending on their intended purpose.
“In my opining, the Thai government is taking a rather proactive approach towards regulating the field of cryptocurrencies. Relevant legislation reflects the combination of prudential supervision and innovative promotion. If a digital currency tends to be used in an indirect financing market, it is more likely to be defined as a currency; and if a digital currency is more used in the direct financing market, its securities attributes are stronger.”
He also indicated that, Japan financial authorities have defined virtual currency as financial goods, and is subject to the Financial Commodity Exchange Law’s constraint. Hu said the regulation concepts in Japan is further advanced than the rest of other countries in the world as they have proposed the specific regulatory measures.
The United States has the most developed country the financial system and is the main source of digital currency. Officials of the US Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) have jointly develop the regulatory classification of ethereum and other cryptocurrencies and discuss whether these cryptocurrencies should be regulated as securities. At this stage, the CFTC is responsible for regulating bitcoin futures trading. The agency is also responsible for investigating cryptocurrency fraud and related activities that manipulating the market.
Hu calls for a unified regulation on blockchain finance and digital currency that be jointly proposed by the central bank, the China Insurance Regulatory Commission and the China Securities Regulatory Commission. The regulatory measures should avoid either inadequate supervision or over-regulation, and applies in-depth research from the perspective of preventing digital currency from financial risks.
“We should gradually build a mature legal system for blockchain finance and digital currency regulation and I believe blockchain finance and digital currency industry have great development potential in China.”