Latest regulations of the People Bank’s of China on Bitcoin

The People’s Bank of China has again made a point, giving much to talk about, especially after the statements made by its director of the business management department, Zhou Xuedong, on the regulatory measures taken by the financial entity to the country’s exchange offices and ensures that they are considered only platforms of Commerce or web pages.

Latest regulations of the People Bank’s of China on Bitcoin
Latest regulations of the People Bank’s of China on Bitcoin

It shouldn’t be forgotten that since the beginning of the year, Chinese financial authorities have carried out repeated inspections of Bitcoin exchange houses and also set up discussion tables with them to create better regulation, a situation that has triggered tension between cryptocurrencies exchange companies, causing some imbalance in the price of Bitcoin.

Zhou Xuedong explained the reasons that led the People’s Bank of China (PBOC) to conduct inspections and regulations at the Bitcoin exchange houses throughout the country, which were heavily grounded in the irregular volatility of the cryptocurrencies in the nation.

Regulations mandated by China’s finance authority seek to build in each of the Bitcoin exchange houses an internal organization or system that will help authorities avoid and counteract the money laundering that occurs within the platforms. And under these terms it forces the exchange houses to comply with the prevention requirements based on the identification and acquisition of certificates (both the user and the house) if they want to carry out any transaction.

Traders will also be required to make a record of transactions and identities that will serve as information to legal and law enforcement authorities in case any of the clients engage in an illegal activity.

The document also listed a suspicious transaction type group that has a specific and already studied behavior that should be followed by the companies as a protocol in order to be able to identify which transactions are suspicious and thus inform the Central Bank if there is any criminal activity.

Zhou said that most of the platforms investigated altered the marketing numbers in order to attract a greater number of customers, as well as the exchange houses allegedly engaged in exchanges and transactions outside the system and transparency guidelines, a situation that together was considered a speculation that could not be overlooked. This meant, the manager explains, a great danger for investors who like to take risks and bet on disruptive technologies, which motivated the authorities to examine and regulate such investments.

Finally, under the worrying gaze of the followers of Bitcoin, it was confirmed that Bitcoin exchange houses are not exactly exchange houses in China but “web pages or marketing platforms”, and only if they were subject to governmental requirements could obtain a certificate that approves them as legal exchange houses. In addition, it is not allowed to replace legal tender using Bitcoin as a payment instrument.

These resolutions together with the evident lack of consensus between the authorities and the managers of the exchange houses have actually increased the tension between the users of Bitcoin in China and the trades related to this cryptographic currency.

However, China’s Central Bank is still in the regulatory process concerning Bitcoin, and new measures aimed at combating money laundering are expected soon. In the meantime, it also confirms that the central bank is committed to the development of blockchain technology projects and technological advances concerning fintech companies.

Comments are closed.