China, which has always been home to the vast majority of cryptocurrency miners and most companies in the crypto universe, tightened its crackdown on this market and drove it out of the country for good throughout 2021. Now, Beijing’s eyes turn to the NFTs and metaverses, sectors that, according to the Chinese central bank, present “risks” to the financial system and that can be used for money laundering.
This Wednesday (1), the People’s Bank of China (PBoC) spoke at the national financial security summit. On the occasion, Gou Wenjun, director of the anti-money laundering unit (AML) of the Chinese monetary authority, highlighted the risks associated with the new “darlings” of the crypto universe, the NFTs and metaverses.
For him, even if people use this technology to guarantee their privacy and as investment alternatives, digital assets would always be likely to be used for illicit purposes, such as for the money laundering and tax evasion.
China fights everything beyond its control
We can see that what bothers Chinese authorities the most is the accelerating advance of cryptocurrencies and blockchain technologies. Decentralization really scares governments that want to maintain full control over the national economy. Naturally, China wants to apply new regulatory requirements and a more advanced inspection system on the rising market of NFTs in the country, already leaving the ground ready for the arrival and popularization of the so-called metaverses, which Meta (ex-Facebook) talks so much about. respect.
According to the head of the AML, this type of advance presents security risks which must be properly recognized by the authorities. Wenjun adds that NFTs and metaverses share the same nature as cryptocurrencies, so they could become tools of criminals.
PBoC suggests automated monitoring system
Thus, the authority of the People’s Bank of China suggests keeping an “objective” view on the evolution and development of technologies related to digital assets. He believes it is necessary to “clarify the division of oversight responsibilities, improve the transparency of cryptoactives and explore the use of protection and oversight solutions” to ensure the security of the national financial system.
A second step would be to strengthen the monitoring and analysis of digital asset transactions in China, something that Beijing already does very well. Banks and payment services that provide traditional currency gateways to cryptocurrencies should authenticate senders and recipients with real names, improving the ability to identify suspicious transactions.
For this, the PBoC official suggested improve the application of new technologies and establish a transaction traceability system of digital assets. These government tools would apply artificial intelligence, machine learning, and other technologies to label accounts that transact with investigated addresses.
Finally, Wenjun was willing to improve cooperation between financial intelligence agencies around the world to form an international coalition to fight cryptocurrency-related crimes: “The Money Laundering Prevention Center would continue to deepen information sharing and joint investigation cooperation with 60 overseas financial intelligence agencies.”
With information: Cointelegraph