China’s FUD with Bitcoin is expanding into the crypto space. The Central Bank of China promises to monitor the Metaverse and Non-fungible tokens(NFTs). This is according to an executive from the People’s Bank of China (PBoC), Gou Wejin.
Wejin, the director of the Anti-Money Laundering(AML) unit in PBoC, pointed to the risks of the new and unregulated cryptocurrency technologies. The technologies include NFTs and the Metaverse.
Gou says that even though people are using digital assets to acquire and store wealth, the digital assets might pose as money-laundering and tax evasion schemes. China is trying to avoid illicit use of the new technologies. According to China, the cryptocurrency world is transforming quickly; therefore, it requires supervision and guidance.
Evolution of Cryptocurrency Virtual Assets
Considering the evolution of virtual assets and the development of underlying technologies, Wejin proposed to clarify several things,
- The division of supervisory responsibilities
- Improvement in the transparency of virtual assets
According to AML, banks and financial institutions should strengthen the analysis and monitoring of digital assets. They should authenticate senders and receivers using cryptocurrency transactions with real names to identify any suspicious transactions.
A Tracking System and a Digital Asset Transaction Asseatability
According to PBoC, institutions supporting cryptocurrency transactions should establish a scene tracking system and digital asset transaction asseatability. Such a system will use modern technological trends like Artificial intelligence, Machine Learning, and Data Science to label accounts that trade with addresses with no names.
Gou says PBoC is open to improving cooperation among financial institutions and intelligent agencies. PBoC wants to sensitize intelligent financial agencies globally to form a coalition to fight against cryptocurrency-related crimes. AML will deepen co-investigation cooperation and information sharing with about 60 overseas financial intelligence institutions.
China is not the only state that is careful about the new cryptocurrency technologies; Russia is also in the mix. However, Russia is fully supporting cryptocurrency; the only thing Russia does not keep is tax evasion. Russia, just like China, is planning to monitor the cryptocurrency markets.
Monitoring the cryptocurrency space seems impossible. Giving users names to transact is a violation of the essence of cryptocurrency, anonymity. China might try to monitor the gateways of financial institutions, but it is impossible to monitor the whole system.
Watching the crypto space will create a decentralized system, something people are trying to run away from. A few regulations might help stabilize the cryptocurrency markets and protect its users from scams; however, monitoring the whole crypto-verse is impossible. Traders will always find ways to evade the system.
Like Elon Musk told the cryptocurrency regulators, SEC to let the markets fly, so should China. Monitoring, following, and banning the use of cryptocurrency only creates more awareness and acceptance. Many people are accepting the use of cryptocurrency due to China’s FUD with Bitcoin mining since last year. Regulation is essential, but not in a dictatorial fashion.
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