The latest attitude of the central bank towards Bitcoin trading platforms: tolerance and temporary non-banning

In recent weeks, the international Bitcoin market has seen a dazzling change. With the general increase in the price of international Bitcoin exchanges, although domestic investors are still cautious and wait-and-see, according to the trading data of OKCoin, a well-known domestic Bitcoin exchange, the price of Bitcoin fluctuated widely throughout the day yesterday, rebounding to the highest level of 8350, with an intraday amplitude of more than 300 points. As of press time today, the rebound trend is still continuing, and the latest price of the currency is trading at 8300.

Data source: Bitcoin trading platform OKCoin
As part of finance, 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, proposed that domestic Bitcoin trading platforms should be tolerated and not banned for the time being, leaving an observation period, but in the short term, the regulatory red line of Bitcoin trading platforms must be clarified and strictly regulated. A negative list should be established to do a good job in risk prevention and mitigation.

"In the long run, it is necessary to study and explore long-term regulatory mechanisms." Zhou Xuedong said that we need 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, we need to strengthen the regulatory cooperation mechanism, strengthen industry self-discipline, and build a Bitcoin exchange integrity system. It is necessary to learn from international regulatory experience, study and build a long-term regulatory mechanism, and maintain financial stability.

The United States currently treats Bitcoin as a commodity and regulates it through the CFTC. However, in the process of Bitcoin's development, the regulatory agencies involved are much more complicated. From the perspective of regulatory agencies, the United States is divided into four regulatory agencies: banking regulatory agencies, the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC), and the U.S. Internal Revenue Service (IRS). The four regulatory agencies have different perceptions and regulatory measures on Bitcoin; from the perspective of the subject of regulation, the attitudes and treatments of federal laws and state laws towards Bitcoin are also significantly different.

As of 2017, there are more than 12 million Bitcoins in the world, across more than 100 countries, with more than 10 million Bitcoin players, most of whom are from Japan, China, Europe and the United States. The regulatory process of Bitcoin varies from country to country.

USA

On July 23, 2013, the U.S. Securities and Exchange Commission (SEC) recognized Bitcoin and other virtual currencies as currencies.

On April 14, 2014, the United States Internal Revenue Service (IRS) designated Bitcoin as movable property.

On September 17, 2015, the U.S. Commodity Futures Trading Commission (CFTC) designated Bitcoin as a commodity.

On June 3, 2015, the New York State Department of Financial Services (NYDFS) issued a business license for virtual currency businesses.

Japan

On March 7, 2014, the Japanese Cabinet ruled that Bitcoin is not a currency.

On December 17, 2015, the Financial Services Agency (FSA) of Japan established regulations to regulate Bitcoin exchanges.

On February 24, 2016, Japan's Financial Services Agency (FSA) plans to amend legislation to recognize Bitcoin as a currency.

On March 4, 2016, the Financial Services Agency (FSA) of Japan officially recognized the currency status of Bitcoin and digital currencies.

Russia

On January 27, 2014, the Central Bank of Russia made the use of virtual currency illegal.

On July 2, 2014, the Russian Central Bank authorities believed that digital currencies should not be completely banned and were studying the application scenarios of Bitcoin.

On June 11, 2015, the Russian Central Bank's government stance became more favorable to Bitcoin.

On January 16, 2016, the Russian Central Bank officially lifted its ban on Bitcoin and virtual currencies.

Europe

On October 29, 2012, the European Central Bank (ECB) stipulated that Bitcoin is movable property, but it is not subject to traditional financial industry regulation.

On July 4, 2014, the European Banking Authority (EBA) stated that European banks should not trade virtual currencies such as Bitcoin until specific regulations are introduced.

On October 22, 2015, the European Court of Justice (ECJ) stated that Bitcoin transactions are means of payment and are exempt from consumption tax.

On October 18, 2016, the European Central Bank (ECB) stated that EU member institutions should not promote the application of digital currencies.