This is the first time that local financial supervision departments have shut down enterprises suspected of providing software services for virtual currency transactions, and it is also considered that virtual currency transactions have been completely banned from entering the implementation stage in China. Not long ago, the relevant departments of the People's Bank of China interviewed some banks and payment institutions, and made it clear that banks and payment institutions should not provide products or services such as account opening, registration, trading, clearing and settlement for related activities. The fifty-first meeting of the the State Council Financial Committee pointed out that it is necessary to severely crack down on bitcoin mining and trading, and resolutely prevent individual risks from being transmitted to the social field.
Experts interviewed said that domestic virtual currency has entered a comprehensive supervision stage from production to circulation. The disorderly speculation and barbaric development of virtual currency eroded the national monetary sovereignty, disrupted the economic and financial order, and seriously endangered the national financial security. Virtual currency is characterized by decentralization and anonymity. Without strong supervision, cross-border money laundering and terrorist crimes will be facilitated. However, the soaring and plunging market has aggravated the financial market turmoil, or may induce systemic financial risks.
Virtual currency will be rectified and then overweight. Recently, the Beijing Local Financial Supervision Bureau, in conjunction with the Business Management Department of the People's Bank of China and relevant departments of Huairou District Government, cleaned up and rectified the channel-taking culture suspected of providing software services for virtual currency transactions, and solemnly warned relevant institutions within their jurisdiction not to provide business premises, commercial exhibitions, marketing promotion, paid diversion and other services for virtual currency-related business activities. Financial institutions and payment institutions within their jurisdiction shall not directly or indirectly provide services related to virtual currency to customers.
According to industrial and commercial information, Daodao Culture was founded on April 20 16 13, and was simply cancelled on June 200218 10. Its registered place is Huairou District, Beijing, with a registered capital of RMB 3 million. The legal representative Gong Wei holds 0/00% of the shares of/kloc, including Moli.com and its subsidiaries.
It is a true portrayal of China's total ban on virtual currency transactions that the financial supervision department in Beijing has cleaned up and rectified enterprises suspected of providing software services for virtual currency transactions. Not long ago, the relevant departments of the People's Bank of China interviewed some banks and payment institutions such as Industrial and Commercial Bank of China, Agricultural Bank, China Construction Bank, Postal Savings Bank, Industrial Bank and Alipay on the issue of providing services for speculating virtual currency transactions.
Before financial institutions and payment institutions were prohibited from providing virtual currency-related services, the blockade of virtual currency exchanges and "mines" had also begun. After Weibo's account was banned, keywords such as "Huobi", "Bian" and "okex" in the virtual currency exchange were banned by Baidu and Weibo in early June.
Prior to this, in mid-May, 20021,three trade associations issued an announcement, reiterating that activities such as exchanging legal tender and virtual currency, providing information intermediary and pricing services for virtual currency transactions violated relevant laws and regulations, and were suspected of illegal fund-raising, illegal issuance of securities, illegal sale of tokens and coupons and other criminal activities. The fifty-first meeting of the the State Council Financial Committee pointed out that it is necessary to severely crack down on bitcoin mining and trading, and resolutely prevent individual risks from being transmitted to the social field. Subsequently, Xinjiang, Yunnan, Sichuan and other places successively cleaned up and shut down the virtual currency "mining" project.
In the opinion of the experts interviewed, the total ban on virtual currency transactions in China is mainly to block the transmission of virtual currency risks.
The first is market risk. Virtual currencies such as Bitcoin enter the trading market on a limited scale, which easily gives investors the illusion that "imported goods can live" and is easily controlled by the influence of a few institutional investors or individuals. In particular, the rise of group-based "mining" can easily lead to the acquisition of bitcoin by large institutions or organizations, thus manipulating the bitcoin market and price.
The second is transaction risk. Many investors tend to get rich overnight, and the trading leverage is usually enlarged to five times or even higher, which is a huge trading risk. Under the huge market shock, a large number of highly leveraged investors instantly "exploded". In addition, since 20 19, the problem of "difficult withdrawal" of virtual currency has become increasingly apparent.
The third is technical risk. Whether the anti-risk ability of the virtual currency trading platform can match the rapid growth of trading volume and whether the blockchain and other technologies can withstand the test of security are all practical problems faced by the virtual currency trading market. The cross-border bitcoin trading platform was exploited by hackers, resulting in the loss of bitcoin hosted by the platform.
The fourth is compliance risk. Because of its high anonymity and decentralized distribution, virtual currency is not only completely divorced from the real economy, but also easier to become a tool for money laundering, drug trafficking, smuggling, illegal fund-raising and other illegal and criminal activities. The transaction is not only not protected by law, but also touches the legal bottom line and red line. Bitcoin derivatives and "air coins" are full of Ponzi schemes and lies.
Zeng Zheng pointed out that virtual currency, as an alternative investment, has become a tool for telecom fraud, casino opening and other crimes or cross-border money laundering in the past few years, which has seriously undermined the stability of China's market economic order. Virtual currency may also impact sovereign currency in essence. In order to protect digital currency's sovereignty and enhance the competitiveness of RMB under the global monetary system, it is necessary to strengthen the supervision of the existing virtual currency system and guard against financial risks.
Pan Helin pointed out that in the past few years, virtual currency has produced a wave of bubble speculation around the world, and many overseas financial institutions have participated in it. However, virtual currency does not have the property of guarantee, and the price has high volatility, which may eventually lead to the bursting of the virtual currency bubble. Once the virtual currency bubble bursts, the risk will be transmitted to financial institutions. China took action to ban the trading of virtual currency, precisely to block the transmission of virtual currency risks, to prevent the slow progress, to nip in the bud, and to practice the principle of financial prudence.
Affected by the comprehensive domestic ban, the price of Bitcoin has recently hovered around $35,000, which is close to the "waist cut" compared with the price of more than $60,000 in April this year. With the sharp drop in bitcoin prices, virtual currencies such as Ethereum, Coin 'an, Ripple, dogecoin and Litecoin have also fallen.
In fact, the collapse of virtual currency has become the norm. On May 19, Bitcoin once fell below $40,000/piece, and the price reached the low point of the previous three months. With the sharp drop of bitcoin, the cryptocurrency market as a whole ushered in a sharp drop. As of May 200219, 14: 05, the 24-hour decline of Ethereum 15.98%, Litecoin1/0/.76%, Doecoin1.76.
Prior to this, at around 6: 00 on May 13, the price of Bitcoin experienced a rapid decline, reaching a minimum of $45,500, which was more than $ 10000 compared with the intraday high, and fell by nearly 15.29% in 24 hours. Ethereum fell over 10%, and Ripple fell over 17%. In recent days, the fiery Shiba Inu coin once fell by more than 40% DOGE and dogecoin 17% in the 24 hours at that time.
In the morning of April 23rd, Bitcoin fell below $50,000, the first time since March 8th. Then on the same day 15: 59, Bitcoin fell below $48,000. On the morning of April 18, bitcoin plunged nearly $8,000 an hour, with an intraday decline of more than 15%.
Every time Bitcoin crashes, it also drives the virtual currency to plummet collectively. When Bitcoin fell below the $50,000 mark, Ripple fell by more than 15%, and Ethereum fell by more than 9% to around $2,253. When Bitcoin plunged 15% in one day, Ethereum plunged 20%, Coin An plunged 17%, Ripple plunged 26%, dogecoin plunged 19%, and Litecoin plunged 28%.
Dong Ximiao pointed out that compared with general investment products, virtual currencies such as Bitcoin are speculative, speculative and volatile. Due to the immature trading market and imperfect regulatory rules, the risk of virtual currency trading is extremely high. Especially in emerging economies such as China, the financial market and investors' literacy have great room for improvement, so it is not only necessary but also urgent to strengthen the supervision of virtual currency through strict measures.
Dong Ximiao suggested that in the next step, China should improve laws and regulations, take targeted measures and carry out centralized rectification activities of virtual currency mining and trading activities. At the same time, it is necessary to further strengthen and improve investor education, enhance the pertinence and effectiveness of education, and improve the risk identification and prevention ability of ordinary investors on virtual currency. The public should fully understand the nature and risks of virtual currencies such as Bitcoin, resist the temptation, protect their wallets and not participate in any form of transactions or speculation. In addition, China should strengthen international supervision cooperation, enjoy supervision information and solve many problems in cross-border supervision of virtual currency.