Too much regulation? Let’s take a look at other countries’ attitudes towards Bitcoin

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On Wednesday (January 25th, Beijing time), the central bank once again issued an announcement on the investigation of Bitcoin trading platforms.

Based on the preliminary inspection results and the problems found, the inspection team decided to continue to conduct further inspections on payment settlement, anti-money laundering, foreign exchange management, information and fund security. The inspection team reminded investors to pay attention to the legal compliance, market volatility, fund security and other risks of Bitcoin platform transactions, and to participate in Bitcoin investment activities with caution. (Quoted from the central bank website)

From the initial announcement on January 6th that the central bank had interviewed the relevant persons in charge of the three major Bitcoin trading platforms, to the working group officially entering the trading platforms on January 11th, to the three major Bitcoin platforms shutting down their leveraged financing businesses and starting to charge transaction fees, to yesterday's warning to investors to be prudent in participating in Bitcoin investment; 2017 does not seem to be so friendly to Bitcoin.

While Chinese Bitcoin investors are shocked by the central bank's drastic measures, they may also be wondering whether the control is excessive.

However, those who think that such supervision is already strict are simply too young and too simple. Let us take a look at the attitudes of other countries towards Bitcoin.

Russia : Those who exchange Bitcoin for rubles may be sentenced to four years in prison. The Russian Central Bank has said it will take opposing measures and will regard the use of Bitcoin as improper behavior, and this view is also supported by Russian Prime Minister Putin. (As expected of a fighting nation)

Ecuador : Banning Bitcoin and establishing a national digital currency. In 2014, the National Assembly of Ecuador passed a bill to amend the country's existing monetary and financial laws. The bill bans Bitcoin and other decentralized digital currencies and will issue digital currencies backed by the country's central bank and domestic liquidity. The digital currency will be backed by the country's central bank and integrated into its extensive financial system and supervised by the National Assembly. The number of issuances will depend on the needs of the country's citizens.

Bolivia : Bans all digital currencies “The Central Bank of Bolivia officially banned any currency not issued or managed by the government in 2014.”

Even in the United States, different states have different attitudes towards Bitcoin.

In the laws of various states in the United States, there is a great deal of autonomy in the interpretation of money services laws, the core of which is how to define money and monetary value.

California 's definition of currency is limited to sovereign currencies, while its definition of monetary value may extend to virtual currencies;

Texas has indicated that certain virtual currency exchanges are subject to its money services law, which generally covers third parties that provide virtual currency and sovereign currency conversion transactions;

Kansas defines virtual currency as neither currency nor monetary value based on Black's Law Dictionary, and therefore virtual currency transactions are not regulated by its laws unless sovereign currencies are involved;

Idaho defines virtual currencies as payment instruments under its definition of currency, and thus the issuance, sale, and conversion of bitcoins requires a money transmitter license.

New York State believes that it is not enough to simply apply the existing legal framework to virtual currencies. On July 17, 2014, they released a draft regulation of BitLicense, which requires individuals and companies engaged in virtual currency-related services to have a formal license and follow the corresponding regulations.

Looking back, it seems that the approach chosen by the People's Bank of China is more scientific. While carrying out supervision, it has established a unique digital bill trading platform to provide positive guidance for the funds that have entered the market.

Yesterday's other piece of digital currency news was good news.

According to media reports, the blockchain-based digital bill trading platform promoted by the central bank has been successfully tested, and the legal digital currency issued by the central bank has been trial-run on the platform. A research and development center will be established in the near future to continue to improve it; the digital currency research institute under the central bank will also be officially listed after the Spring Festival. This means that the People's Bank of China will become the first central bank in the world to issue digital currency and carry out real applications, and will take the lead in exploring the practical application of blockchain.

Since the creation and development of Bitcoin has not been taken over by any truly legal regulatory agency, if Bitcoin or even electronic currency wants to achieve long-term development, it must be "free to do what one wants without going beyond the rules." Finding a way to get a country to recognize its legal status and prove its legal identity is the fundamental. Of course, it seems impossible for Bitcoin to become a legal currency. Since there are no established rules for the management of Bitcoin, any effort to give Bitcoin a legal identity is beneficial, and the exploration of the central bank will be a crucial step in the history of Bitcoin development.

The central bank’s supervision of Bitcoin may be telling us that a bright future lies ahead for China’s electronic currency and even the international electronic currency market.