Chinese state representatives visited San Francisco last week to meet with distributed ledger technology businesses and regulatory agencies to discuss fintech and cryptocurrency regulations. Officials from the People’s Bank of China, Shanghai New Financial Research Institute, and the Peking University Digital Finance Research Center were among the delegates that took part in the trip.
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US and Chinese Representatives Agreed on The “Need to Emphasize the Relationship Between Innovation and Stability” With Regards to Cryptocurrency Regulations
Representatives from China’s central bank and several Chinese research institutes met with US cryptocurrency start-ups and regulatory agencies in San Francisco across August 23-24. Chinese media outlet Sohu reported that the trip was intended “to promote the exchange of financial and technological fields between China and the United States.”
The Chinese representatives met with a wide array of entities during their trip, including Circle, Coinbase, Ripple, fintech start-ups Prosper and Sofi, financial institution Wells Fargo, and the San Francisco Federal Reserve. The Peking University Digital Finance Research Center (IDF) and the Shanghai New Financial Research Institute will soon publish a joint report detailing the delegation’s findings regarding “the status of US financial technology development, regulatory model” making recommendations for Chinese regulators. The discussions focused on the topics of fintech and cryptocurrency regulations, central bank issued digital currencies, and money laundering prevention.
Sohu reports that the delegation members reached a number of “effective and valuable” points of “consensus”, including the “need to emphasize the relationship between innovation and stability” with regards to the development of cryptocurrency and fintech regulations. According to Sohu the discussions successfully “established channels of communication [between] industry agencies… [and] regulatory bodies” from both China and the US.
Delegates Attributed “the Rapid Development of China’s Internet Financial Industry” to China’s “Relatively Loose Regulatory Attitude”
The meetings revealed great insights into China’s regulatory considerations with regards to cryptocurrency and fintech. IDF Director Huang Yiping is reported to have emphasized the need for regulators to “effectively control the risk of internet finance, while not stifling the power of innovation and opportunities,” attributing “the rapid development of China’s internet financial industry” to China’s “relatively loose regulatory attitude.”
Representatives from the Bank of Sun Guo-Feng are reported to have articulated their belief that a sound regulatory apparatus should comprise three components – “financial institutions, technology companies, and regulatory technology companies.” The Chinese officials also “stressed” the importance of “artificial intelligence technology” in “prevent[ing] systemic financial risk.” In order to effectively manage the risks associated with financial technology, the PBOC will “focus on the development of a macro-prudential management frameworks in regulatory technology, either by independent research and development by regulators or by outsourcing research and development.”
The delegation was led by Huang Yiping, the director of the Digital Finance Research Center of Peking University and Vice President of the National Development Research Institute of Peking University. Other Chinese representatives included the secretary general of the Chinese Financial Society, the executive of the Shanghai New Financial Institute, the Director of the Institute of Finance for the Bank of Sung Guofeng and the head of research for the Chinese Finance Association of Internet Strategy – illustrating the significance of the meetings.