The People’s Bank of China (PBOC) issued a draft regulation that updates its mandate for the age of fintech—and laid the foundations for the central bank’s digital currency. Cryptocurrency rig maker Ebang continues to expand abroad, looking to get into financial services. Authorities cracked down on a money-laundering scheme using Tether, while some government agencies showed, once again, that they are willing to use blockchain technology for governance.
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The world of blockchain moves fast, and nowhere does it move faster than China. Here’s what you need to know about China’s block-world in the week of Oct. 20-26.
Laying down the law
- On Sunday, the PBOC released a draft regulatory framework that updates the central bank’s mandate for the digital age. The regulation (in Chinese) is open for public comment until Nov. 23.
- The draft legalizes the digital yuan with a simple provision: China’s official currency, the renmimbi, comes in both physical and digital form, the law says.
- According to an article released by state-owned newspaper Global Times commenting on the new regulation, the digital yuan will not be rolled out nationally for another two to three years.
- The regulation states that the central bank’s jurisdiction include “important” financial “infrastructure” and “companies,” spelling out its authority over China’s sprawling digital sector. This language was absent in the previous iteration of the PBOC law, passed in 2003.
- The law makes special reference to “non-bank” digital payment providers, which include Alipay and Wechat Pay.
READ MORE: INSIGHTS | China’s digital currency has a long way to go
Global ambitions for Ebang
- Crypto mining rig manufacturer Ebang is looking to establish a digital asset management platform in Australia. The firm established a subsidiary in the country and has applied for licenses with the local regulator, according to a company statement.
- Ebang has been spreading its wings around the world. It set up a subsidiary in Singapore in August, looking to set up a cryptocurrency exchange.
- In pursuit of a global digital asset platform, it set up another subsidiary in Canada in September, and acquired a licensed New Zealand broker and wealth management firm in October.
Tether crackdown
- Last week, the Chinese central bank announced it cracked down on illegal activity tied to the cryptocurrency Tether. According to a statement posted on the PBOC’s Wechat account, 77 people were arrested and three sites were shut down, with the help of local authorities.
- The suspects laundered RMB 120 million ($17.95 million) of illicit gambling profits, using the stablecoin for some of the illegal activity. Tether is pegged to the US dollar at a one-to-one ratio.
Okex almost back to normal
- Crypto exchange Okex resumed some of its operations following a shutdown on Oct. 16 when one of its founders became involved in a police investigation.
- Fiat-to-cryptocurrency as well as peer-to-peer transactions were working again, the exchange said on Oct. 21. Withdrawals remain on pause.
READ MORE: Major disruptions at Okex, Filecoin strike: Blockheads
Government-backed blockchain
- A spokesperson for the China Securities and Exchange Commission said that blockchain technology will be used in the future for debt and equity registration. (Sina Finance, in Chinese)
- A blockchain-based health code registration system developed by FISCO BCOS allowed 17 million tourists to travel between Macau and Guangdong since May, it said on Oct. 21. (Cointelegraph)
Filecoin update
- Digital file storage token Filecoin got off to a bumpy start after its Oct. 15 launch. Chinese miners found that the late reward system made mining too capital-intensive, and unplugged their mining machines. Filecoin decided to allow for mining rewards to be released faster than the original six-month payoff window.
- The coin’s price started rising over the weekend and it hit a high of $40 on Monday. It is now trading at $35.