National People's Congress representative Zhou Xuedong suggested: Bitcoin property tax should not be cancelled for the time being and should be levied as soon as possible

The strong trend of Bitcoin is still continuing. Its secondary market price has already reached the same level as gold and is highly sought after by many investors. How to regulate the Bitcoin market and prevent bubbles? Today, Zhou Xuedong, deputy to the National People's Congress and director of the Business Management Department of the People's Bank of China, suggested in an interview with reporters that the regulation of Bitcoin should focus on both the present and the long term. In the short term, it is necessary to clarify the regulatory bottom line of Bitcoin trading platforms, establish a negative list, and draw regulatory "red lines"; in the long term, it is necessary to learn from international regulatory experience, incorporate regulation, and explore the construction of a long-term regulatory mechanism.

Talking about the Bitcoin market bubble: observe for a period of time and accurately locate and include it in supervision

Reporter: How do you view the development of Bitcoin?

Zhou Xuedong: Many people, including those who invest in Bitcoin, don’t really know much about Bitcoin. Bitcoin is a virtual commodity in the Internet society. It has no value in itself. Its trading and development use blockchain technology. It is not a currency in essence. It is not “issued” by the state. It cannot be used for commodity trading and payment. The state does not endorse the trading and investment of this virtual product. From the end of last year to the beginning of this year, the price of Bitcoin rose rapidly. Many people followed suit and speculated in Bitcoin. The risks involved are actually quite large.

Reporter: What are the risks of Bitcoin?

Zhou Xuedong: At the end of last year, the trading volume and price of Bitcoin fluctuated greatly. Not only was it suspected of engaging in illegal financial business and manipulating the market, but it also accumulated considerable bubbles and market risks. Since the beginning of January this year, the People's Bank of China's Beijing and Shanghai branches have jointly conducted on-site inspections of major Bitcoin trading platforms in Beijing, Shanghai and other places with local financial regulatory authorities. The inspection found that some trading platforms had problems such as illegal financing and currency lending businesses and incomplete anti-money laundering internal control systems. From the perspective of protecting the public interest, government departments do not encourage everyone to follow suit and participate in Bitcoin speculation.

Reporter: Will Bitcoin be banned?

Zhou Xuedong: Bitcoin has been traded globally since the beginning. Even if the trading platform is banned, you cannot ban this virtual product on the Internet. Without the platform, public transactions will go underground, making it more difficult to regulate. In addition, this is a new thing that has emerged in the development of network technology, especially blockchain technology. It also has a certain reference value for tracking, studying and evaluating the application of blockchain technology. From a long-term perspective, letting it exist for a period of time for observation and evaluation, and at the same time properly regulating it, will also help protect the public interest and the healthy development of the Internet economy.

In the short term, dynamic regulatory assessments are needed for Bitcoin. At the same time, the regulatory bottom line for Bitcoin and other virtual commodity trading platforms and websites should be clarified, a negative business list should be established, requiring trading platforms not to cross the boundaries, and risk prevention and investor protection should be done well. Administrative penalties or closure and abolition measures may be taken against institutions that violate regulations seriously.

In the long run, it is indeed necessary to explore the establishment of a registration management system by local financial management departments in accordance with the virtual commodity trading platform management measures; national financial management departments and industrial and commercial, tax and other departments shall formulate new regulatory rules in accordance with the current regulations and division of responsibilities, and each shall be responsible for implementing functional supervision, including financial credit business, anti-money laundering, foreign exchange management, business scope, advertising, taxation and other aspects, in order to build a long-term regulatory mechanism, maintain financial stability and protect the rights and interests of investors.

Talking about the sharing economy: As information costs decrease, more new forms of "shared bicycles" will emerge

Reporter: What do you think of the sharing economy represented by shared bicycles?

Zhou Xuedong: Shared bikes, Didi Taxi, etc. were not initially cultivated by the government as an economic or industrial form. Instead, they were formed spontaneously by the market under the drive of market demand. Moreover, they were created when Internet technology developed rapidly and information costs dropped significantly. They were also a kind of market innovation. In fact, there was such demand in the past, but shared bikes did not appear because the information costs or market transaction costs were too high. In the past, we could not have kept our mobile phones connected to the Internet all day long like we do now. The mobile data charges were too high. Now, information costs have dropped significantly, and the Internet economy, or the shared economy, has a sustainable basis for commercial existence.

Reporter: This year's government work report proposed to completely cancel domestic long-distance and roaming charges within the year, and information costs will be further reduced.

Zhou Xuedong: Yes. All mobile phone roaming charges and domestic long-distance charges will be cancelled within the year, and the information and transaction costs of the whole society will be further reduced. I believe that the sharing economy will develop faster and will give rise to more new industrial forms like shared bicycles.

Talking about property tax: It is suggested to introduce it as soon as possible, even if it starts from the third house

Reporter: The real estate tax bill was not submitted to the Standing Committee of the National People's Congress for deliberation at this year's "Two Sessions". Do you suggest imposing a real estate tax?

Zhou Xuedong: Fundamentally speaking, I think the most core economic means for regulating the real estate market must be tax policy, that is, the imposition of real estate tax. Many of the current means are administrative, or partially administrative. Over-reliance on administrative means is costly, policy loopholes are large, and home buyers' behavior is easily distorted, which can easily breed moral risks, such as fake divorces. However, whether it is a developed country or a developing country like Indonesia, the regulation of real estate, especially the control of housing prices, is mainly carried out through real estate taxes. In addition, the imposition of real estate taxes can also increase local fiscal revenue and become a sustainable and stable source of tax revenue for local financial resources. At the same time, local governments have a stable and reliable source of tax revenue, and some fees on enterprises can be cancelled to reduce the burden on enterprises.

Reporter: When do you suggest the levy be implemented?

Zhou Xuedong: In theory, it should be levied as soon as possible. Of course, according to the principle of statutory taxation, legislation must be made before the real estate tax is levied. In practice, if you think the social impact is too great, you can start with small steps. At the beginning, even if the tax rate is lower and the policy is more relaxed. For example, you can start with the third property under the name of a couple, etc. In short, this thing will be done sooner or later, and it has to start.