The recent policy developments reflect the Chinese government’s determination to regulate the digital currency market, prevent financial risks, and protect consumer rights. Here are some key points:
1. Strengthening the supervision of digital currency transactions: In order to ensure the security and legality of digital currency transactions, relevant policies emphasize that they will continue to strengthen the supervision of digital currency trading platforms, implement strict review and supervision mechanisms, and ensure that the platforms operate in compliance with regulations.
2. Clarify the legal status of virtual currencies: It has been reiterated in multiple notices that virtual currencies not issued by monetary authorities, such as Bitcoin, Ethereum, and stablecoins such as Tether, do not have the same legal status as legal tender. It emphasizes the status of central bank digital currency (CBDC) as the only legal sovereign digital currency, and strictly prohibits any unauthorized institution from issuing digital currency without authorization.
3. Prevent and deal with trading speculation risks: Introduce measures to further prevent and deal with speculation in virtual currency transactions to maintain national security and social stability. This includes cracking down on illegal financial activities involving virtual currencies in accordance with relevant laws and regulations.
4. Standardize core links: The regulatory policies jointly issued by the five ministries and commissions comprehensively cover the core links of digital currency issuance, trading, custody and exchange, ensuring that the entire process complies with national laws and regulations.
5. Protecting consumer rights: While strengthening supervision, we also focus on protecting the legitimate rights and interests of consumers and preventing property losses caused by market chaos.
These notices and regulations mark a new stage in China's digital currency regulation, which is stricter and more detailed, and aims to guide the healthy development of the industry through the improvement of the legal framework, while curbing behaviors that may cause financial risks. As the market continues to change, more targeted policies are expected to be introduced in the future.
