Lack of effective regulation in the field of cryptocurrency

Xuan Changneng, deputy governor of the People's Bank of China, said at the round table “Financial Infrastructure and Financial Services in the Digital Era” at the Boao Forum for Asia Annual Conference 2023 that it is necessary to speed up the improvement of regulatory mechanisms that are compatible with the digital economy. Financial supervision is the basic institutional arrangement to ensure the stable operation of digital finance, and the lack of supervision will exacerbate irrational market behavior.

Xuan Changneng took

cryptocurrency

as an example to explain that since the outbreak of the international financial crisis, major developed economies have implemented ultra-loose monetary policies for a long time, causing market players to worry about the depreciation of credit currency assets. In this context, based on blockchain technology, cryptocurrency emphasizes the attributes of decentralization and rule algorithms, trying to form a countermeasure against credit currency, so it is sought after by many investors in an environment with abundant liquidity. But from the point of view of actual operation, cryptocurrencies and those cryptocurrencies created out of thin air have not solved the problem of credit currency.

Xuan Changneng believes that there is a lack of effective supervision in the field of cryptocurrency, and behaviors such as market manipulation, abuse of market transactions, and misappropriation of client assets have repeatedly occurred. He believes that cryptocurrencies have many hidden risks because of trading platforms, traders and other reasons. “The cryptocurrency trading platform involves the exchange with fiat currency, leveraged transaction costs and other links in the process of trading. These links are controlled by the trading platform, the issuer, the dealer, and the market maker. This is a very centralized matter. .” Xuan Changneng reminded.

Xuan Changneng emphasized that in the field of digital finance, more regulatory attention and regulatory resources should be invested, and regulation should remain in awe when grasping the scale of innovation. On the one hand, support positive technology applications, leave enough space for innovation, and better meet the requirements of market players for financial service safety, convenience, and inclusiveness; Incorporate supervision and adhere to the principle that facts are more important than forms. The various new models and new products produced by new technologies used in finance are not simply accepted and recognized, but verified and confirmed, so as to achieve effective external constraints and supervision.