Xinhua: we will resolutely crack down on speculation and guide blockchain applications

Recently, the activities of hyping up virtual currencies have resurfaced in some regions, and many institutions are engaged in pyramid selling fraud and other illegal activities under the guise of blockchain. In this regard, relevant departments have taken active actions to "block the evil path" while "opening the front door". On the one hand, they have intensified the crackdown on "speculation"; on the other hand, they have guided the block chain to play a more beneficial role in solving the difficulties and pain points in the development of the real economy by guiding the block chain to explore and apply in the financial field in a safe way.

Regulation has stepped up its crackdown on "coin speculation"

Recently, many once participated in the "speculation" people found that the long silence of the currency circle began to "boiling", affecting their nerves is the bitcoin and other virtual currencies soaring prices. At one point, it soared more than 40 per cent, pushing its price above $10,000, prompting some to smell an opportunity for speculation or even to cheat under the guise of blockchain.

Regulators in shenzhen issued a warning on Wednesday on the risks of preventing virtual currency speculation, saying that some illegal activities have been revived due to the promotion of blockchain technology. Earlier, Shanghai, guangdong dongguan and other places have also issued relevant risk warning.

Risk notes issued in many places clearly point out that some institutions infringe on the legitimate rights and interests of the public by absorbing public funds by issuing so-called "virtual currencies", "virtual assets" and "digital assets". Such activities are not really based on blockchain technology, but on speculation of blockchain concept to illegally raise funds, pyramid schemes and fraud.

Reporters learned from relevant departments, at present, the local regulatory departments are investigating the territory of the "speculation" activities, firmly hit early hit small, outcrop hit. At the same time, financial regulators have also joined hands with the China Internet finance association to promptly dispose of newly emerging virtual currency trading venues, initial coin issuance (ICO) activities and offshore trading currency platforms. In addition, regulators have also stepped up supervision of commercial Banks and third-party payment institutions.

Since 2019, relevant departments have disposed of more than 200 domestic and overseas virtual currency trading platforms, closed nearly 10,000 relevant payment accounts, and closed nearly 300 WeChat marketing and publicity programs and public accounts.

People from the people's bank of China (pboc) said that China still maintains a strict crackdown on virtual currency transactions and the policy orientation has never changed. In essence, ICO is a kind of illegal public financing behavior without approval, which is suspected of illegal issuance of scrip, illegal issuance of securities, illegal fund-raising, financial fraud, pyramid selling and other illegal criminal activities. All kinds of scrip issuance and financing activities are prohibited in China.

Blockchain is not equal to virtual currency to guide the reasonable exploration of blockchain

Digital cryptocurrency is based on blockchain technology, but blockchain technology is not equal to hyping virtual currency. Industry experts said great importance should be attached to the application of blockchain in the financial sector, so that it can play a real role in solving the difficulties and pain points of financial services.

Dong ximiao, a distinguished researcher at the national laboratory of finance and development, said that due to the characteristics of the technology itself, blockchain has significant advantages in registration, payment and settlement, exchange and transmission of financial asset transactions, and has been gradually applied in the financial field in recent years. In some business scenarios such as supply chain finance and cross-border payment, blockchain has started to move from proof of concept to business practice.

Recently, the state Internet information office released the second batch of block chain information service in name and registration number, among them, the industrial and commercial bank financial services based on the block chain, ping an bank SAS block chain platform, unionpay international remit money to the global speed tracking platform, bank of jiangsu suning chain block iot chattel pledge financing platform are obtained for the record.

Industry insiders said that by integrating logistics, information flow, capital flow and other relevant information, financial institutions can better understand the financing needs, solvency, credit risk and other conditions of enterprises by using the features of multi-party information sharing of blockchain. In addition, some technology companies are also exploring the application of block chain technology to build a point-to-point clearing network in response to such problems as high fees and long processes in the field of cross-border payments.

"However, the application of blockchain in the financial sector is not only a technical issue, but may also involve legal system issues." A person close to the central bank said the blockchain technology innovation itself is a good thing, but regulators need to closely observe whether the financial activity process set up through the blockchain is appropriate or in conflict with current financial regulations.

Blockchain technology is yet to be applied in mature financial sectors and needs to be steadily promoted

Industry insiders pointed out that the current exploration of blockchain in the financial sector is still in the early stage, and some applications still face difficulties, which need to be steadily promoted.

First of all, it is difficult to guarantee the authenticity of data before "uplink". "Blockchain can make sure the information is true, but only after 'uplink'." Zhao zhao, deputy secretary general of Beijing Internet law research institute, believes that the authenticity of a large number of block chain data must be verified by a centralized and trusted third-party information intermediary.

Second, blockchain is inefficient. Experts pointed out that at present, countries have relatively efficient institutional arrangements in the field of large and small clearing, while the operation efficiency of the block chain is not suitable for some high-frequency payment scenarios. With a maximum of seven transactions per second, bitcoin is struggling to meet the demand for payments compared with a peak of more than 71,500 transactions per second for cross-institutional payments on singles' day.

In addition, blockchain applications still have shortcomings and problems in security and stability, privacy protection, liability identification, compliance risk and other aspects, and the development of underlying technology still needs to mature.

People from the people's bank of China (pboc) said that in the next step, regulators should strengthen the technical specifications and guidance of blockchain, and guide blockchain technology to play a greater role in promoting data sharing, optimizing business processes, reducing operating costs, promoting collaborative efficiency and establishing a credible system.

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Resolutely crack down on coin speculation "block the evil path" guide blockchain application "open the front door"

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