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China will tighten regulation of virtual currencies - Xinhua

Asia / Business and Finance
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Financial institutions, payment institutions and other agencies should not use virtual currencies to set prices for products or services, the statement said.

China will tighten regulation of virtual currencies - Xinhua

China is ready to tighten supervision over virtual currencies in order to prevent financial risks and speculative activities in this area. The official news agency of the PRC Xinhua writes about this.

A decisive blow must be struck on activities related to the mining and trading of bitcoins, according to a decision taken at a meeting of the Committee on Stabilization and Development of Finance under the State Council of the People's Republic of China held last week.

The meeting also stressed the need to reduce credit risks and strengthen the streamlining of the financial activities of platform companies.

This decision follows as the country's three industry associations recently pledged to tighten restrictions on trading virtual currencies.

Moreover, this decision is widely perceived as an escalation of the regulation of virtual currencies in China, as it provides for the goal of expanding supervision from bitcoin trading to mining. This escalation is expected to help root out the hype for virtual currency transactions.

Financial institutions, payment institutions and other agencies should not use virtual currencies to set prices for products or services, according to a statement released jointly by the China Internet Finance Association, the China Society of Banking Institutions and the China Payment and Clearing Association. </p >

The virtual currency represented by bitcoins is one of certain types of virtual goods that has no monetary properties. For example, it does not have legal tender status, said Dong Simiao, senior researcher at the financial services firm Merchants Union Consumer Finance Company Limited.

According to him, participation in illegal trading and speculation in bitcoins can lead to huge property losses for investors, can disrupt financial stability and social order in the country, so such actions should be strictly regulated.

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