The central bank has cooled down the promotion of third-party Bitcoin applications, which may stagnate

As China is welcoming the "nationwide cryptocurrency speculation", the release of the "Notice on Preventing Bitcoin Risks" (hereinafter referred to as the "Notice") has poured cold water on the booming bitcoin speculation.

On December 5, the central bank and five other ministries and commissions explicitly stated that Bitcoin is prohibited from being circulated and used as currency in the market, requiring financial institutions not to be involved in Bitcoin business, not to price products or services in Bitcoin, and requiring Bitcoin trading websites to register and fulfill anti-money laundering obligations.

After the issuance of the "Notice", not only did the Bitcoin transaction price continue to fall, but it also caused the domestic virtual currency to show a sluggish trading trend in the past week. After the carnival and the downturn, the industry is also reflecting: What is the value of Bitcoin and other virtual currencies? What is the future of virtual currency development in China?

"Virtual currency must be more regulated"

"It does not have monetary attributes such as legal tender and compulsory nature, and is not a real currency." A notice jointly issued by the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission stated that, by nature, Bitcoin is a specific virtual commodity that does not have the same legal status as currency and cannot and should not be circulated and used as currency in the market.

Yi Xianrong, a researcher at the Institute of Finance of the Chinese Academy of Social Sciences, believes that after the craze of "everyone speculating in cryptocurrency", China's timely issuance of regulatory documents to define the basic attributes and functions of Bitcoin will not only help Bitcoin and similar virtual networks return to their nature, but will also greatly reduce the risks that China's financial markets may face.

However, there is no mention of domestic virtual currencies in this document. In China, there are more than 30 domestic virtual currencies that can be mined and traded.

"It is expected that regulators will also include 'altcoins' in the scope of supervision later." Deng Di, one of the founders of Yuanbao Coin, told the reporter of China Business News that the development of virtual currency programs is a technical application or personal interest, and there is no need for regulators to prohibit it at this stage. Once "altcoins" are launched and become a tradable Internet commodity, regulators need to supervise the trading platform to prevent possible fraud and money-making risks.

This newspaper has previously pointed out that from a technical perspective, the development of "copycat coins" is very simple. By simply modifying the Bitcoin code, a virtual currency can be developed. Because of this, the quality of domestic "copycat coins" is uneven.

"The first domestic copycat coin was CHN coin, or Chinese coin, which was a direct copy of Litecoin. After it was launched, it was quickly removed from some trading platforms. So the 'copycat coin' left a very bad impression in the industry from the beginning." In Dundee's view, investors are at great risk in trading this technologically innovative "copycat coin". On the one hand, the developers themselves do not have high technology, and on the other hand, the number of coins cannot be effectively controlled. Therefore, when investors trade a virtual currency, they should also be discerning, especially those currencies whose source code is not open.

In fact, it is not difficult for professionals to develop a virtual currency. How to make it operate well is the key to test the virtual currency developers. Previously, China's "copycat coins" such as Panda Coin and Dragon Coin died in a very short time, which also made the industry not optimistic about the continued operation of "copycat coins".

Dundee told reporters that after the virtual currency goes online, mining pools, trading platforms and users all need professionals to maintain them, while those who just want to "make a quick buck" will not spend their energy to focus on later operations.

Third-party applications may slow down

In the view of industry insiders, the most damaging part of the "Notice" is that it requires financial institutions and payment institutions not to conduct Bitcoin-related businesses.

The reporter learned that the linkage effect brought about by the policy began to ferment, first Tenpay and Alipay stopped the transaction channel service, and then some Internet also stopped the Bitcoin payment function.

Take the recharge and withdrawal of Yuanbao Coin as an example. Previously, users could recharge through Alipay. However, the reporter learned that since December 3, Yuanbao Coin trading platform Yuanbaohui has stopped the payment function of Alipay, and users can only recharge and withdraw through bank cards.

On December 6, Baidu issued a statement saying that Baidu Accelerator decided to stop accepting Bitcoin payments because the recent sharp changes in the value of Bitcoin made it impossible to protect the interests of users. However, Baidu was also the first Internet company to announce the acceptance of Bitcoin - it announced on October 15 that the acceleration platform "Baidu Accelerator" would accept Bitcoin payments.

On December 9, Guokr Electronics immediately issued an announcement stating that in order to comply with the spirit of the document jointly issued by five ministries and commissions, Guokr Electronics had stopped the Bitcoin payment function. More than a month ago, Guokr Electronics opened the Bitcoin payment function, allowing users to purchase its smart watches, smartphones and other items with Bitcoin.

Deng Di told reporters that although the "Notice" blocked the business development space of financial institutions and payment institutions in virtual currency, it undoubtedly played a role in curbing the development and growth of virtual currency in China. On the other hand, some small enterprises are expected to innovate and develop in the field of virtual currency application.

At present, Yuanbao Coin has announced a total of 12 third-party applications on its official website, mainly some Internet websites and Taobao online stores. However, the reporter found that most of the Taobao online stores are "zombie stores" with low credit and unpopular products.

Dundee said that his company is also considering which fields can achieve wider application in the future, such as increasing exploration in the gaming field and cooperating with some large gaming companies in applications. At the same time, the use of virtual currency in the public welfare field is also a direction that can be explored.

On April 21, 2013, after the Ya'an earthquake, Huo Qingchuan, director of the cooperation and development department of One Foundation, posted on Weibo that One Foundation received 50 intended donations of Bitcoin, equivalent to RMB 40,000. In addition, Huo Qingchuan also stated that One Foundation is the first NGO in China to accept Bitcoin donations, and Bitcoin is also the first time to be donated in China.

In the view of Han Feng, a PhD student at Tsinghua University and a Bitcoin researcher, in the Internet age, virtual currencies will continue to have great innovations in payment, public welfare, science and even international trade, providing unlimited possibilities for human transactions.