“The development of digital capital market is still facing the problem of organizational revolution. The most typical, such as the virtual asset exchange, is bound to happen in the future. How to deal with such organizational change is also a problem that we may encounter.”

Said Xiao Gang, former president of China Securities Regulatory Commission at a forum. Xiao also mentioned that the integration with digital currency also faces challenges. Now many countries are developing their CBDC. How can it be integrated with the capital market after it is issued in the future? What are the fundamental changes?

In terms of Chinese definition, bitcoin and other cryptocurrencies should not be defined as virtual currencies, but as virtual commodities / assets. Therefore, virtual asset exchange should refer to other virtual commodities including cryptocurrency.

During the term of office, Xiao Gang had no comments on cryptocurrencies like Bitcoin. But interestingly, just a month ago, on May 21, Xiao Gang, as a member of the Chinese people’s Political Consultative Conference (CPPCC), joined a forum organized by the CPPCC daily with Leon Li, the founder of Huobi. Undoubtedly, their face-to-face discussion will deepen Xiao Gang’s understanding of Bitcoin and cryptocurrency, and even they might establish some personal relations.

But in fact, the official expression of virtual currency is not totally equal to cryptocurrency. In early 2013, China’s central bank pointed out that bitcoin is a kind of virtual commodity and cannot be circulated as money. From this perspective, it seems more accurate to classify bitcoin as virtual assets. “Digital currency’ should specifically refer to the CBDC.

Unlike in the charge of the Securities Regulatory Commission in western countries, the cryptocurrency is in the charge of the central bank in China, so Xiao Gang may not have been involved in this area in the past. In addition to the vague definition of cryptocurrency in the mainland Chinese discourse system, Xiao Gang is unlikely to clearly equate cryptocurrency with virtual assets.

The virtual asset exchange mentioned by Xiao Gang includes virtual commodity like bitcoin as well as intellectual property rights, carbon emissions, company options and even big data. It is more similar to the digital asset trading center and exchange proposed in Chengdu and Hainan.

At present, China’s constructive supervision of cryptocurrency is seriously lagging behind among the world’s major powers, which is also the reason why China’s relevant innovation has been extremely weak in recent years. For example, in this year’s DeFi innovation boom, there are almost no projects from China.

As Xiao Gang said, “China should build the digital capital market according to the digital thinking, and we can’t develop it behind closed doors.”.