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China wants to regulate ‘metaverse’ and NFT’s after banning cryptocurrencies

After banning cryptocurrency trading and digital asset mining, China is focusing on the new hypes of the moment: non-fungible tokens (NFTs) and metaverse projects.

China wants to regulate 'metaverse' and NFT's after banning cryptocurrencies

China wants to regulate ‘metaverse’ and NFT’s after banning cryptocurrencies

In recent statements at the national financial security summit, Gou Wenjun, head of the Anti-Money Laundering (AML) unit of the Chinese Central Bank (PBoC), suggested that there may be a need to regulate these sectors in the same way as cryptoactives.

Gou said it is too risky to leave the new trend in the crypto space unregulated. According to him, although some people use digital assets as a means of storing and aggregating wealth, they can also be used for illicit purposes, such as money laundering and tax evasion.

In addition, the PBoC director of AML also said that as fast as crypto-innovation grows, high-risk means of oversight and governance need to be adopted.

In that regard, he suggested that the nature of cryptocurrencies, NFTs, and real-world metaverse-based items could be used as a money laundering tool.

“They are naturally isolated from the real world. Furthermore, they have a certain degree of interoperability, making it extremely easy to become money laundering tools for criminals,” he said.

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In his speech, Gou even suggested objective ways to improve the transparency of transactions with digital assets.

First, he called on regulators to strengthen the monitoring and analysis of cryptoactive transactions.

At the same time, it urged banks and payment providers, which provide fiat-to-crypto gateways, to authenticate the parties with real names. Thus, the system would be able to identify suspicious transactions.
tracking transactions

Gou also suggested that improved applications and technologies should be provided to track these transactions.

According to the executive, such a system would apply artificial intelligence, machine learning and other technologies to label investigated addresses.

Finally, the AML director called for greater cooperation within regulators and financial intelligence agencies. Its goal is to form an international coalition to fight crimes related to cryptocurrencies.

According to Gou, the unit “will strengthen information sharing and cooperation” with regulators.

In the meantime, it will monitor and prevent “illegal fundraising, fraud, money laundering and other criminal activities”.

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