China explores the disposal mechanism of the involved "Bitcoin", the latest plan from the Beijing Stock Exchange is out!

Since China strictly banned virtual money trading in 2021, how to deal with the involved virtual money has become a major challenge. Recently, the Beijing Municipal Public Security Bureau's Legal Affairs Division collaborated with the Beijing Equity Exchange (Beijing Stock Exchange) to establish a cooperative mechanism for the disposal of involved virtual money. The main process is as follows: the public security organs entrust the physical involved virtual money to the Beijing Stock Exchange for disposal, which selects professional service agencies to carry out testing, receiving, transferring, and other operations on the involved virtual money, and publicly liquidate and sell it through Hong Kong handover agencies. The introduction of this latest plan marks an important step for China in the disposal of involved crypto assets.

1. Disposal Mechanism for Involved Virtual Money: Multi-Department Collaboration to Ensure Orderly Completion

According to the process design, the multi-departmental collaboration established in a protocol manner can ensure the orderly completion of the transfer, inquiry, trading, settlement, and account entry of Virtual Money. After multiple demonstrations, all preparatory work has been completed. On March 29, the Legal Corps guided the Shunyi Branch to sign the "Virtual Money Disposal Business Agreement" with the Beijing Stock Exchange.

2. China Crypto Assets Policy: Strictly Prohibited with Strategic Considerations

According to news on August 3rd, the information circulating in the community that "China has once again officially announced a ban on Crypto Assets trading and mining" may be false news, as no related ban has been announced recently. The Chinese government had comprehensively banned encryption mining activities as early as 2021.

An insider stated during an interview related to stablecoins that China currently does not have a globally influential public blockchain. Another insider suggested that the national-level backbone public blockchain should be built under the leadership of central state-owned enterprises, while the construction of industry-level public blockchains could open up to market competition. One insider remarked: The public blockchain is the infrastructure for the issuance of stablecoins, which is significant and indispensable for us to construct a self-controllable, secure, and efficient financial infrastructure system in the digital financial era.

A person familiar with the policy stated: Stablecoins must be issued on public chains, and the current issue is that neither Hong Kong nor the mainland has a globally influential public chain in China. If using American public chains, there may be political risks in the future, such as Sino-U.S. confrontation, which could lead to being "choked off." The next step is to strengthen investment in public blockchains (i.e., public chains), ensuring autonomy and control, and implementing tiered construction. For example, national-level backbone public chains should be built under the leadership of state-owned enterprises, industry-level public chain construction can open to market competition, and scenario-level public chain construction should be entirely market-driven. Another insider suggested.

Conclusion:

China is exploring the disposal mechanism for involved Bitcoin cases, with the latest plan launched by the Beijing Stock Exchange, showing that while China strictly prohibits Virtual Money trading, it is also actively seeking ways to standardize the handling of involved Crypto Assets. This initiative not only helps to improve China's legal framework but also provides a template for the potential disposal of digital assets in the future.