People’s Daily: regulatory escort bitcoin innovation
Domestic bitcoin 6 price exceeded 20000 yuan, a record high. The past thirty days has doubled. Bitcoin prices rise can not help shouting “in the golden age of the game player bitcoin back”. Of course, we still have a dialectical view of inflation: bitcoin is reflected in the value or market speculation?
Since 2017, bitcoin has experienced a number of roller coaster, often after the emergence of new high flash crash. Bitcoin price volatility, on the one hand reflects the bitcoin investors pursued “heat”, on the other hand, reflect the urgent needs of the industry calls for bitcoin virtual currency as the representative of the class of digital assets supervision legislation.
Bitcoin is sought after game player since its birth, it has made many investors crazy, this is mainly due to the bitcoin and its underlying Many advantages of block chain technology.
On the one hand, digital assets as the representative of bitcoin, although unable to effectively fulfill the currency denominated in units of a medium of exchange, and a store of value and other basic functions, the conditions do not have hard currency. But as digital assets, bitcoin center, anonymous transaction characteristics from the third party control, the value of the lift is based entirely on the market. On the other hand, in the money stock index, and commodity contracts and other investment yields declined, the risk level rising, coins and other digital assets has become one of the best ways to hedge assets of investors.
Since 2016, the blockchain technology has been gradually applied in many fields in finance, law, government, and other things. Bitcoin as a practical case block chain technology the most successful in the first attempt, cross-border payments, clearing and settlement areas, have achieved good results. With the acceleration of global economic integration, cross-border trade, e-commerce and other business activities have become increasingly frequent, as the representative of bitcoin digital currency will move to cross-border payment clearing and settlement or the end of the transition. The domestic financial institutions on the layout and landing wildly beating gongs and drums block chain technology in digital currency, digital assets and digital services and other application scenarios, the initiative compete for competition, involving the financial sector including mobile bills, asset custody, financial products transactions, cross-border direct liquidation etc.. For example, China Merchants Bank has achieved cross-border Official Commercial direct settlement; Shenzhen block chain gold suit bill financing products – “ticket chain” first launched operations in the Bank of Ganzhou.
Digital asset blockchain is expected to change the global asset structure based on the country has important strategic significance. Specifically, according to the world economic forum predicted in 2016, prior to 2025, total global GDP 10% will use the digital asset block chain technology development for storage. In addition, bitcoin digital encryption currency reboxetine currency, many global central bank or commercial bank is studying how to use block chain technology development legal digital currency platform. The bank plans to release issued by the Central Bank of the digital currency RSCoin, and has entered the stage of the preliminary test. Norway’s central bank began to study digital currency this year, and in the early stages of the project has been issued. In addition, the International Monetary Fund, the Federal Reserve and other agencies on the block chain technology has shown a strong interest in. It is worth mentioning that, since 16 years, China’s Ministry of Industry issued the blockchain technology white paper, technical reference frame, block chain technology for the first time to write “” 13th Five-Year “national informatization planning”, the central bank set up a digital currency Institute, the upcoming legal digital currency Demo major positive news, to a large extent boost bitcoin as a representative of the digital asset issuance and circulation market, and provides Easy Access for start-ups and financing bitcoin blockchain.
Despite the popularity of investors bitcoin remarkable, but bitcoin digital asset circulation still exist some potential anonymous. In May 12th, a bitcoin payment to WannaCry for virus spread across the global network, which has small bitcoin become the focus of attention of the world again. Bitcoin anonymous and untraceable features make it easy to be concealed. The illegal use of fraud, money laundering and terrorist financing and other anonymous transactions bring and deliberately hype and other hazards, economic and financial security will form a huge threat to the world. The corresponding digital assets risk supervision legislation in a timely fashion, let bitcoin digital assets within the regulatory framework of healthy and orderly development.
First, formulate relevant laws and regulations, implement supervision of bitcoin penetration and classification regulation. Many countries have started to bitcoin trading platform for supervision, gradually through the specification of bitcoin trading legislation. The United States launched digital currency regulations to restrict and regulate bitcoin transactions; Japan bitcoin transactions into Japan’s financial services agency (FSA) jurisdiction, bitcoin exchange before the line in FSA registration and through financial audit; Australia asked bitcoin companies to provide customers with information and bitcoin value-added tax; Iceland foreign exchange trading law prohibits people bitcoin exchange. To the people’s Bank of China on the management of bitcoin trading platform, bitcoin platform on regulating the anti money laundering is advancing.
Through legislation and other digital currency bitcoin, bitcoin is a healthy development, give full play to the premise and guarantee of value chain block technology. But economic activities related to bitcoin blockchain, field classification measures should be considered the nature of their behavior of penetrating supervision and regulatory classification. See through the surface phenomenon of business essence, the source of funds, and ultimately invest through intermediate links connected together, the whole process of comprehensive information to determine the classification of the nature of the business, and implement relevant regulations. In particular, the investment behavior of legal transactions through bitcoin to legislative protection and supervision of the bitcoin anti money laundering and other illegal acts should be supervised strictly in accordance with the relevant legislation.
Secondly, the establishment of third party credit agencies bitcoin based, regulation of bitcoin account. Bitcoin transactions through the public key technology, so the transaction can be completely anonymous transactions, unable to track. In addition, digital currency transactions without any financial or government agencies, no third party can control digital currency transactions. The user does not really know the working principle and the legal risk, uncertainty and lack of supervision of the case, these facts easily lead to information asymmetry, triggered such as black market, money laundering and other criminal activities.
The establishment of third party credit agencies bitcoin based, bitcoin transactions into third party credit agencies (digital asset trading industry self-discipline organization) under the jurisdiction of the on-line bitcoin exchange registration and financial audit, and the real name authentication bitcoin trading account. Strict third party credit agencies bitcoin account, to track bitcoin account, to prevent illegal bitcoin from the source. It is noteworthy that recently, the people’s Bank of China, CBRC, CSRC and CIRC, the National Standards Commission jointly issued the “financial industry standardization system construction and development planning (2016-2020 years)”. For the industry since the digital asset trade self-discipline, in order to protect the network security and financial security, suggests establishing the industry self-discipline organization, block chain asset trading enterprises in our country together, to block chain data sharing, in the “13th Five-Year” financial industry standard planning guidance, assist the regulatory departments to develop digital assets and non bank payment and other areas trading standards, combating money laundering crime.
Furthermore, launch the regulatory sandbox system, test application in applicable scope allows bitcoin, block chain technology. The supervision system is set up in 2015 the British sandbox. The UK financial conduct authority (FCA) to implement supervision on financial innovation application sandbox technology, engaged in financial innovation mechanism must be established in the “security zone”, according to the FCA approval process submission and limited authorization, can test the innovation in the scope of products and services. Subsequently, Singapore, Australia, Japan and other countries have launched a different version of the supervision system of the sandbox. In the supervision system of the way of using the sandbox in several countries is similar, largely followed the British model. But there is a great difference in the regulatory scope of sandbox, Singapore sandbox supervision confined to the financial field of science and technology, and the scope of supervision of the sandbox in Britain and Australia is more wide, covering the product or service is significantly different from the traditional financial services, the core standards are beneficial to consumers.
Bitcoin blockchain, the regulatory sandbox mode, according to different industries, different products and services of the characteristics of the development of the corresponding threshold, the test time and the test plan, give more room for innovation, such as bitcoin blockchain financial science and technology enterprises, is conducive to promoting domestic financial enterprises to lead the global technology innovation and industrial development, and the national system of financial security risk reduction.
Finally, the establishment of a unified electronic currency of the international dispute settlement mechanism, perfect electronic evidence preservation system bitcoin transactions. Bitcoin is established in a borderless platform, construction of everyone involved and all nodes participating in the supervision to the center of the security trading system. However, bitcoin trading platform is usually a website, once the website by hackers break, the consequences be unbearable to contemplate. To strengthen international cooperation to jointly establish a unified electronic currency of the international dispute settlement mechanism, the bitcoin block chain into the framework of financial supervision, the controllable risk to a minimum.
At present, the development of bitcoin, block chain financial technology is still in its early days, the information security problems faced in the development of Internet banking in the future in the development and application of bitcoin blockchain, also will encounter. For example, the trading platform suffered hacker attacks, payment in bitcoin blackmail virus incident etc.. According to the above concerns, without exaggerating the risk, and should see bitcoin application and innovation of financial security dialectically.
Overall, it is necessary to encourage bitcoin, block chain innovation and development of new technology in the field of safety, but also to put it in the regulatory framework in the development of the sandbox. Economic activities related to bitcoin blockchain, field classification and grading policy, depending on the nature of the business of penetrating supervision and regulatory classification.
Source: People’s Daily Overseas Edition
Author: Yang Wang, director of financial research Haldex financial science and technology research institute;
Feng Hexia, Haldex financial science and Technology Research Institute senior fellow finance.