China’s legislative bodies are working hard to update and pass laws that focus on blockchain. They want to create a clearer set of laws and rules. This project will also deal with the risks that come with it and make sure that the growth of digital trade and investing is safe and fair.
Yuan Xiaobin is in charge of these talks. He is a well-known member of the National Committee of the Chinese People’s Political Consultative Conference and the head of the management committee at Zhonghao Law Firm. Yuan has been closely watching how the digital yuan (RMB) project, China’s first digital currency project that started field testing in some areas in 2020, has grown and what it means.
Yuan says that the digital RMB is unique because it has the ability to make deals much more efficient, safe, and clear. This could be very important in fighting money laundering and making the financial system more trustworthy. However, Yuan points out a major flaw in the current legal system for cryptocurrencies.
The current rules, like the People’s Bank of China Law and the RMB Management Regulations, don’t make clear provisions for the digital RMB. This makes it unclear what its legal standing is and how it should be used. This lack of legal clarity, along with the fact that the technology behind the digital RMB is still very new, makes people worry about possible risks, such as the protection of user data.
Yuan says that the digital RMB has a long way to go before it is widely accepted. He points out that the fact that people are already used to and comfortable with third-party payment systems like WeChat Pay and Alipay makes it hard to introduce new payment methods. Even with these problems, Yuan wants the relevant laws to be changed quickly to give the digital RMB clear legal support. He stresses the need for rules that cover its creation, steps to stop money laundering, and the defense of customer rights.
Yuan also suggests setting rules for people who want to use digital RMB on their own, as well as a staged marketing plan to make sure it is used in real life. It’s important to him that the relationship between digital currencies and traditional money is made clear so that there is a smooth way for users with different interests and needs to switch digital currencies for fiat currencies. Yuan also stresses how important it is to keep looking into cryptocurrencies in the context of new technology, with the goal of incorporating these new forms of money into China’s digital economy.
At the same time, Dong Jin, who is a member of the National People’s Congress and the head of the National Blockchain Technology Innovation Center, wants laws for blockchain and other new digital technologies to be passed faster. During the National Two Sessions, Dong stressed how important it is for legal structures to reduce the risks that come with new technologies, creating a healthy environment for the growth of the digital economy. Even though the fast growth of apps powered by AI, blockchain, and privacy computing is good, it makes information security and transaction fairness more difficult, which is why clear laws are needed.
Blockchain is seen as an innovative instrument around the world, but it also has some problems. Dong says that rules haven’t caught up with how fast technology is changing, which is holding back the wider use of blockchain technologies. This delay puts the environment at risk when it comes to carrying out contracts, making sure they are legal across borders, and keeping data safe.
Smart contracts, one of the most important new technologies that blockchain has made possible, show how the technology can be used to make deals easier in many fields, such as banking and supply chain management. But the legality of these digital contracts is still up for debate, which limits how they can be used.
In line with Yuan’s ideas, Dong supports a unified approach to laws and rules, emphasizing how important it is to balance new ideas with risk management. He suggests using adaptable rules, like risk ratings and real-time tracking, to encourage technology progress while keeping people safe from possible threats.
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