Topic: [2017-11-30]China Banker: Formalize Blockchain to Curb Underground Money Flow (Read 1638 times)

They can take an example from Japan. But in my opinion, they want to get a price.
Or they deliberately make such statements to change the course. It's been so long now such questions are solved, it's kind of weird

I do not believe that the Chinese government will win the bitcoin. We saw a definite drop of bitcoin in the background of these events, but the price quickly recovered. I doubt that the Chinese left bitcoin. This is a big sum of money and the price would recover. The Chinese just left in the shade. Who will benefit from this? I hope this experience will benefit other governments who want to ban bitcoin.

Right now, the Chinese authorities are assuming that they are winning the war against cryptocurrency but they know deep inside that it is not fully the case because they understand well how creative and resourceful the Chinese are. They can find ways and means to be a part of something many already learned to love: cryptocurrency. Until they will never formally recognized this fact, then the underground movement will continue and at the end it is the government that is losing big time. This is actually what Japan wanted to avoid in the first place that is why they embraced and regulated Bitcoin rather than exert unnecessary effort to impose a ban. The Japanese government then is more wiser than their Chinese counterparts (no offense meant!).

One of the most logical statements coming from an official recently. This is inevitable for all governments, in my opinion: The more they try to ban or restrict cryptocurrencies, the more money will be driven off the grid and underground. If governments want to make money off of cryptocurrencies, they have to find a way to legalize and regulate them.

November 29, Beijing- Li Lihui, ex-President of the Bank of China and now the director of Blockchain working group of China Internet Finance Association, delivered a speech on the annual meeting of Caijing. He suggest that the certain technology should be adopted commonly to “prevent underground flow of tokenized capital”.

“Technological innovation is changing the financial landscape in three ways: big data promotes inclusive finance, artificial intelligence spawns smart finance and blockchain promotes 3-D financial system. But generally speaking, innovation of financial regulations lags behind technological innovation. Some common technologies should be adopted to prevent the underground flow of tokenized funds.”
On November 29, Li Lihui, former governor of the Bank of China and leader of the blockchain working group of China Internet Finance Association, said in the annual meeting of Caijing Media.
Li Lihui believes that building trust in traditional financial system is very costly due to information gap. The big data applications help solve the problem and achieve inclusive finance. For example, Alibaba’s Ant Financial has released more than 800 billion microfinance loans by using big data technologies last year.
Secondly, the integration of AI and big data system can improve the accuracy of credit evaluation and risk evaluation. Intelligent account registration and intelligent underwriting can lower the threshold of financial transactions, expand the scope of financial transactions and achieve financial fairness.
Thirdly, the underlying core technologies of blockchain, such as smart contract, have prominent technical advantages in financial products involving multiple participants and high complexity. They can make rules, coordinate management, avoid duplication, improve efficiency and reduce costs. For the time being, blockchain technology has outstanding advantages in financial scenarios with low frequency and high complexity.
Li Lihui also said that the innovation of the financial system lags behind that of technological innovation. Among them, the innovation of the trust system lags behind in three aspects: lack of consistency of data, lack of reliability and lack of compliance.

For example, the credit rating data concerning profit-making corporations are stored separately in banks, industrial and commercial administration, tax administration, customs administration and so on. Their credit rating standards are various and the caliber is different. Most small and micro businesses do not have the trust mark and therefore cannot accumulate credit. In addition, the inadequate protection of privacy information has greatly affected the development of inclusive finance. The lack of financial regulations on blockchain and virtual finance should be caught up as soon as possible.

Finally, Li Lihui mentioned changes on financial institutions’ innovation should be made in three aspects as follows:
Improve the application of big data laws and regulations.

Establish a common shared big data system.
Formulate a common system of prudent data financial regulation.
Speed up the construction of the data financial system, speed up the development on formalizing blockchain finance, strengthen the coordination of international supervision, especially the supervision of blockchain, virtual finance and virtual currency among major countries.
Bitcoin and other cryptocurrencies are still considered an option for money laundry due to its peer-to-peer and censor-resistant nature. From the regulator’s point of view, the unregulated money flow through bitcoin has developed too fast to be monitored.

http://news.8btc.com/china-should-formalize-blockchain-standard-to-curb-undergroud-flow-of-tokenized-capital