China cracked down on cryptocurrencies in 2018 and it has been banned since. However, the nation has always been ahead in terms of blockchain technology development. But as the crypto industry continues to innovate, digital currencies are slowly shaping up to become the future of money. On this note, a former Chinese official believes that the nation needs to reform its crypto laws as crypto will inevitably be part of the emerging digital capital market.
Xiao Gang, former chair of the China Securities Regulatory Commission, believes that the nation is undergoing a digital economy transformation and the rights regulations must be embraced to keep up with the rapidly growing market.
Speaking at the 19th Pushan Lectures of China Finance 40 Forum, or CF40, held online on July 7, an event attended by multiple officials discussing the lessons learned from the 30-year development of China’s capital market, Xiao said:
“The development of the digital capital market faces the problem of organizational change. The most typical, such as the cryptocurrency exchange, is bound to happen in the future. How to deal with such organizational change is also a problem that we may encounter.”
According to Xiao, the boundaries of various products and services available in this market are slow becoming undefined and the current regulations won’t be able to keep up with a market that is fast evolving throughout the globe.
He noted that protecting the investors is a priority, but getting the balance wrong while executing it could potentially lead to bigger problems.
He further adds that a lot of different factors are yet to be addressed before fostering the growth and development of the Chinese digital capital market. Some of these issues include the emergence of monopolies, the development paths, decentralization, and information disclosure, all of which need to be further clarified, discussed, and researched.
More research needs to be done
He concluded that some basic principles must be upheld:
“We must adhere to the principles of openness, inclusiveness, sharing and fairness in the development of the digital capital market […] we should actively embrace new technologies, prudently innovate business models […] promote data connectivity and create a fair market environment.”
China has been tinkering with crypto-based laws for quite some time now. Most recently, the parliament has passed a new civil code that includes protecting the civil rights of inheritance, marriage, property, personality, contract, and infringement.
Per the new law, the Chinese citizens would be able to pass on their cryptocurrency and other virtual assets to their heirs as an inheritance, starting January 1, 2021.
One the other hand, China continues to focus its efforts on the development and implementation of blockchain technology in both the public and private sectors.The nation has seen a spree of blockchain companies come into existence, with major private companies equally contributing to the blockchain space.