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China central bank to establish crypto asset transaction tracking system

forkast.news 29 November 2021 11:57, UTC
Reading time: ~2 m

The director of China’s central bank’s anti-money laundering office said the People’s Bank of China will establish a tracking system for the virtual assets, such as cryptocurrencies and NFTs, for cracking down on virtual-related crimes, adopting technologies such as artificial intelligence and machine learning, mainland China local media reported.

Fast facts

  • Gou Wenjun said at a forum of the First Lujiazui National Financial Security Summit and 11th China Anti-Money Laundering Summit that virtual assets have helped in illegal transactions such as extortion, drug trafficking, gambling and money laundering, challenged risk supervision and governance, and threaten investor rights, economic order and financial security, according to the report.
  • Gou said banks should strengthen the monitoring and analysis of virtual asset transactions and authenticate the real names of parties involved in virtual-asset transactions.
  • In addition, Gou said the central bank will continue to work with 60 overseas financial intelligence agencies to track virtual assets’ transactions both in domestic and foreign to support law enforcement agencies.
  • Gou said the central bank will work to “improve the transparency of virtual assets, and explore the use of regulatory sandboxes to determine the essence and effects of virtual assets,” and “guide the market to abandon the imagination of anarchy and decentralization.”
  • China has banned all cryptocurrency-related transactions, even for those made via crypto exchanges based outside of China. However, cryptocurrency transactions from mainland China still exist. Mainland crypto traders register overseas companies to circumvent policy crackdowns.
  • Chinese authorities remain cautious about the latest decentralization technologies. State-owned media have continuously criticized NFT collections and warned of the risk that the metaverse could bring to the market and national security.

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