The Regulation of Cryptocurrency in China

Abstract

The essence of blockchain is distributed ledger technology (DLT) that is disintermediated, unchangeable, and decentralized. As an application of blockchain technology, cryptocurrency has impacted the current financial legal relationship, and its regulation is becoming increasingly important. Some international organizations and countries have ratified laws and regulations concerning cryptocurrency. The supervision and regulation of cryptocurrency have some problems currently, such as consumer protection, the opposition between the global asset flow and the supervision of a single sovereign state, and the difficulty in determining the subject of legal responsibility. To seek solutions to these problems in China, firstly it is necessary to define the legal attribute of cryptocurrency, to balance blockchain innovation and financial risk. At the same time, the regulatory sandbox can be used to regulate blockchain-based cryptocurrency. The core regulatory points are to establish the technical standard access system, financing audit registration system, and investor suitability management system of blockchain financial enterprises.