In November, at least five Chinese cryptocurrency exchanges were forced to shut down or shut down after the latest legal actions from Beijing. However, on another side, the representative of the Bank of China confirmed that China is preparing to allow security token offerings (STOs) within a strict regulatory framework.
STO will be adopted in China?
The information was disclosed from Weimin Guo, chief scientist of the Bank of China, in the Financial Finance Technology Summit in Beijing.
Guo said:
“China’s Digital Currency Electronic Payment (DCEP) would play a significant role in tackling the issues that traditional payments systems have across the nation. The digital yuan would focus on supporting the nation’s retail operations. And, eventually, expand its use towards wholesale and more complex businesses. ”
Weimin Guo, chief scientist of the Bank of China
According to Guo, once the central bank’s digital currencies are born, China will open the doors to security token offerings (STOs). These types of digital assets are regulated financial securities that are backed by real-world tangible assets such as stocks, bonds, or real estate.
The Chinese bureaucrat affirmed:
“STOs would be allowed to launch within a strict regulatory sandbox mechanism.”
Guo’s remarks come after Zhou Xiaochuan, the president of the Chinese Finance Association and former governor of the People’s Bank of China (PBOC), said that China is making significant strides towards the development of the DCEP for retail and international settlements.
Zhou declared:
“One of the main issues that were considered before launching the digital currency was the relationship between monetary and financial policies. The world is facing a low-inflation environment. In this case, we need to study monetary policy to determine what the purpose of monetary policy is, and whether to emphasize the independence of monetary policy more. ”
Bitcoin is a failed test
Besides, Guo founded Bitcoin as a failure test of the United Kingdom. Guo states:
“Bitcoin was not released at an appropriate time. Although the technology was needed sooner or later, its success depended on the right time.
And, Bitcoin was launched with the wrong goal. That such a purpose is nearly impossible to achieve, and this is what could have caused Bitcoin to fail.
Instead of trying to solve the main setbacks of traditional payment gateways, Bitcoin was set to combat the global financial system. And that’s the reason why Bitcoin fails”.
Five cryptocurrency exchanges shut down in China
Elsewhere, on November 23, the Bitsoda exchange informed the community about the decision to stop providing services. A day later, it was Akdex’s turn to say that it would be closed indefinitely.
Also, on November 24, IDAX cited Chinese government regulations as a reason to prevent domestic users from continuing to use its services.
With the same argument, the Btuex exchange on November 25 announced that it would terminate the service immediately and reopen in the future to non-mainland Chinese users.
Previously, on November 4, Biss revealed that it was “actively cooperating” with the investigation of the authorities in the operation and will resume transactions as soon as possible.
Since then, the Chinese authorities have arrested at least ten individuals connected to the exchange. Although the information surrounding the reason for the arrest is still very vague, the sources all believe that it is likely because Biss was found to have violated China’s cash flow management regulations.
Read more:
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- People’s Bank Of China (PBoC) In Shanghai: Blockchain – Not Bitcoin