‘State­less dig­i­tal to­kens like bit­coin not le­gal cur­ren­cies’

New Straits Times - - Business / World -

SHANG­HAI: A se­nior ex­ec­u­tive at China’s state-backed In­ter­net fi­nance body said yes­ter­day “state­less” dig­i­tal to­kens such as bit­coin pose risks as they can be used for il­le­gal ac­tions, and rules are needed to sup­port the de­vel­op­ment of “le­gal” dig­i­tal cur­ren­cies.

The com­ments came a day after one China bit­coin plat­form said it would close on Septem­ber 30 and a few hours be­fore a sec­ond plat­form an­nounced it was stop­ping op­er­a­tions as well.

Li Li­hui, a se­nior of­fi­cial at the Na­tional In­ter­net Fi­nance As­so­ci­a­tion of China and a for­mer pres­i­dent of the Bank of China, also told a con­fer­ence, here, that global reg­u­la­tors should work to­gether to su­per­vise cryp­tocur­ren­cies.

His com­ments came as Bei­jing cracks down on the cryp­tocur­rency busi­ness to con­tain risks as con­sumers pile into a highly risky mar­ket that’s grown rapidly this year.

BTCChina, a ma­jor Chi­nese bit­coin ex­change, said on Thurs­day it would stop all trad­ing from Septem­ber 30.

That sparked a slide in the value of the cryp­tocur­rency, leav­ing it more than 30 per cent be­low the record high of nearly US$5,000 (RM20,947) on Septem­ber 2.

Vi­aBTC, a smaller bit­coin ex­change, yes­ter­day be­came the sec­ond to an­nounce its clo­sure at the end of this month.

Some users of China’s Twit­ter-like Weibo plat­form said yes­ter­day they used the price fall to buy more bit­coin to trade over­seas, while oth­ers said they were with­draw­ing their bit­coin or cash from trade.

Li said “dig­i­tal to­kens like bit­coin, ethereum that are state­less, do not have sov­er­eign en­dorse­ment, a qual­i­fied is­su­ing body or a coun­try’s trust, are not le­gal cur­ren­cies and should not be spo­ken of as dig­i­tal cur­ren­cies”.

The state-backed In­ter­net fi­nance body was set up by the cen­tral bank and its mem­bers in­clude banks, bro­ker­ages, funds and con­sumer fi­nance com­pa­nies.

On Wed­nes­day, it urged mem­bers to abide by laws and not deal in cryp­tocur­ren­cies. Reuters

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