Why do NPC deputies frequently mention Bitcoin during the Two Sessions?

Bitcoin is a digital currency that exists in the form of P2P, and uses blockchain technology to achieve distributed accounting. Bitcoin became popular in China in 2010. Since Bitcoin has the same properties as gold investment products: fixed total amount and scarcity, Bitcoin is also known as electronic gold. The total number of Bitcoins issued is 21 million, but only more than 10 million people in the world know and use Bitcoin.

Any innovation and the rise of new technologies must comply with formal and legal rules and regulations. As a great innovative technology, foreign countries are tolerant of the development of Bitcoin and have clear regulatory mechanisms. In the United States, Bitcoin has obtained legal status in some states such as California. The New York Department of Financial Services (DFS) has issued a proposal on the norms, rules and regulations for companies to buy and sell virtual currencies. In 2016, the Financial Services Agency (FSA) of Japan officially recognized the currency status of Bitcoin and digital currencies. In the same year, the Central Bank of Russia officially abolished the ban on Bitcoin and virtual currencies.

As an economic power, China also attaches great importance to the Bitcoin industry. In 2013, the People's Bank of China and five other ministries and commissions jointly issued the "Notice on Preventing Bitcoin Risks", which stipulates that Bitcoin is a virtual commodity and citizens can buy and sell it freely, but they need to bear the risks themselves. In January 2017, the central bank set up a working group to enter the three major domestic Bitcoin trading platforms to understand the operation of Bitcoin trading platforms and conduct inspections on payment settlement, anti-money laundering, foreign exchange management, information and fund security. The inspection team reminded investors to pay attention to the risks of legal compliance, market volatility, fund security, etc. of Bitcoin platform transactions, and to participate in Bitcoin investment activities prudently.

After the guidance of the central bank, the price of domestic Bitcoin trading platforms returned to rationality. According to the market data of OKCoin in January, Bitcoin has shrunk from the highest price of 8,888 yuan in three years to the lowest price of 4,885 yuan. Although the market of Bitcoin has been like a car, the intervention of supervision has made the market return to rationality.

OKCoin has been established for nearly four years since 2013, and its position in the industry is self-evident. The central bank team has settled in the Bitcoin trading platform. While actively cooperating with relevant departments, Xu Mingxing also took the initiative to advocate industry self-discipline and put forward nine self-discipline conventions. The nine industry self-discipline conventions include setting up a compliance department, a reliable and controllable system, complying with financial order, voluntary filing by enterprises, strengthening user education, anti-money laundering and anti-telecom fraud, anti-pyramid selling, anti-market manipulation, anti-fund misappropriation, and information sharing among peers. At the same time, actively cooperate with supervision to guide the industry to develop positively and healthily in China. Finally, Xu Mingxing emphasized that OKCoin will actively cooperate with the People's Bank of China and other relevant departments to regulate the Bitcoin blockchain industry. Xu Mingxing said, "The industry needs to face up to the risks, and all companies in the industry should actively formulate measures to lead the industry to the sun.

As domestic trading platforms strictly abide by laws and regulations and actively cooperate with regulatory authorities, form an industry self-discipline alliance to jointly formulate anti-money laundering standards for the Bitcoin industry, and comprehensively upgrade the platform's anti-money laundering system, users in the domestic Bitcoin trading market have also returned to rationality. However, the market's attention to Bitcoin is still high, and Bitcoin has also become one of the topics of discussion during the annual two sessions.

Central Bank's Zhou Xuedong: Domestic Bitcoin trading platforms should be tolerated and not banned for the time being

On March 6, Zhou Xuedong, deputy to the National People's Congress and director of the Business Management Department of the People's Bank of China, suggested that domestic bitcoin trading platforms should be tolerated and not banned for the time being, leaving a period of observation. However, in the short term, the regulatory red lines for bitcoin trading platforms must be clarified and strict supervision must be implemented.

"In the long run, it is necessary to study and explore long-term regulatory mechanisms." Zhou Xuedong said that it is necessary to study the financial attributes and commodity attributes of virtual currencies such as Bitcoin, study the nature of Bitcoin trading platforms, explore the introduction of national-level Bitcoin trading platform management pilot policies, and conduct licensing or filing pilots for a small number of qualified trading platforms. At the same time, strengthen the regulatory cooperation mechanism, strengthen industry self-discipline, and build a Bitcoin exchange integrity system.

NPC deputy Wo Weidong: Suggestions on reasonable regulation of Bitcoin to promote its healthy development

On the afternoon of March 7, Wo Weidong, Chairman of Shanghai Huiyin (Group) Co., Ltd., suggested in his speech that Bitcoin should be placed under the legal framework to promote its healthy development.

Wo Weidong said that the recent efforts by the central bank to increase supervision of Bitcoin trading platforms have achieved many results, clarified the nature of Bitcoin, curbed market bubbles, and at the same time, the risks to social funds have been initially controlled.

However, Wo Weidong believes that while achieving the above results, we must also observe related problems. "Currently, the trading volume of Bitcoin in China has dropped significantly, and the trading volume of major Chinese trading platforms has fallen to less than 1% of the original." In contrast, before this, more than 90% of the global trading volume took place in China. Because China previously occupied a high position in trading volume, "there is no doubt that it has the global pricing power of Bitcoin, and has sufficient voice and influence on Bitcoin and even the blockchain industry."

Wo Weidong said that major countries around the world are actively exploring new things like Bitcoin and blockchain, so they cannot be simply denied or abandoned. He suggested that Bitcoin be included in Internet financial supervision and that appropriate regulatory strategies be formulated. "An appropriate regulatory strategy can truly stimulate, promote and lead innovation while controlling risks."

Compared with gold and stocks, the market value of Bitcoin is very small, but the underlying application technology of Bitcoin, blockchain, has attracted a lot of attention. As blockchain technology has been officially recognized, markets around the world are studying the feasibility of blockchain technology and digital currency. The People's Bank of China is also publicly recruiting relevant talents and practicing digital currency. In such a context, it is believed that countries will be more tolerant of the Bitcoin industry.