The regulatory policy of the Chinese government towards virtual currencies has always been centered on preventing financial risks and maintaining economic security. Since the joint notice issued by the People's Bank of China and ten other departments in September 2021 (on further preventing and addressing the risk of virtual currency trading speculation), our country has established the strictest regulatory system for virtual currencies in the world and promoted standardized industry development through systematic policy combinations.
### I. Comprehensive Deepening of the Regulatory Framework
1. **Legal System Improvement**
The newly revised judicial interpretation by the Supreme People's Court in 2023 raised the sentencing standards for illegal fundraising and money laundering involving virtual currencies by 30%. In judicial practice, there have been multiple rulings on virtual currency pyramid schemes with amounts exceeding 10 billion yuan. The Beijing Internet Court's ruling in 2023 on the "invalid contract case of Bitcoin mining machines" established judicial precedent, clarifying that domestic virtual currency-related transactions are not protected by law.
2. **Upgrading Penetrating Regulatory Technology**
The national blockchain vulnerability database has recorded 278 security vulnerabilities related to virtual currencies. Financial regulatory authorities have achieved on-chain transaction tracking through the "Spark·Chain Network" system, assisting public security organs in cracking down on money laundering cases involving USDT with an amount of 120 billion yuan in 2023. The "Virtual Currency Risk Warning Platform" established in Zhejiang can monitor over 5,000 related websites in real-time.
3. **Cross-Border Regulatory Cooperation Mechanism**
In 2024, the central bank and the Hong Kong Monetary Authority established a "digital currency regulatory sandbox" to jointly develop a cross-border capital flow monitoring system. Under the G20 framework, our country promotes the establishment of a global tax information exchange mechanism for virtual currencies and has signed regulatory memoranda with 48 countries.
### II. Deep Reconstruction of Industrial Impact
1. **Optimization Effect of Energy Structure**
The power resources released by the shutdown of illegal mining sites in Inner Mongolia, Sichuan, and other places are equivalent to reducing carbon emissions by 18 million tons per year. After the National Development and Reform Commission listed "virtual currency mining" as an industry to be eliminated, the load rate of the related regional power grid decreased by 12 percentage points.
2. **Shift in Financial Technology Development**
The structure of blockchain patent applicants has changed significantly, with the proportion of financial institutions rising from 17% in 2020 to 43% in 2023. The cumulative transaction amount of the Industrial and Commercial Bank of China's blockchain trade financing platform has exceeded 12 trillion yuan, and the application of digital yuan smart contracts has expanded to 30 livelihood scenarios.
3. **Rational Return of Investment Behavior**
Monitoring by the China Internet Finance Association shows that the number of active virtual currency investors in the country has decreased by 89% compared to 2021, and the proportion of risk assets in household financial asset allocation has returned to the level of 2016. Investor education has reached over 500 million individuals, and the number of new illegal fundraising cases has decreased by 67% year-on-year.
### III. Strategic Advancement of the Digital Yuan
The latest data from the Central Bank Digital Currency Research Institute shows that the pilot scenarios for the digital yuan have covered over 4,000 categories, including livelihood payments and government services, with a cumulative transaction count of 9.5 billion times. The "digital yuan cross-border payment pilot" conducted in Qianhai, Shenzhen, achieved a daily average transaction amount of over 50 million yuan for cross-border consumption by Hong Kong residents' digital wallets.
In terms of technical architecture, the digital yuan adopts a "dual-layer operation system" and "controllable anonymity" design, ensuring both payment efficiency and risk control. The system upgrade completed in 2023 supports innovative functions such as offline transactions and smart contracts, with peak transaction processing reaching 300,000 transactions per second.
In the global central bank digital currency competition, our country has established bilateral cooperation mechanisms with 29 countries. The Bank for International Settlements (BIS) report in 2024 shows that the use of digital yuan in international trade settlements accounts for 6.2%, an increase of 4.5 percentage points compared to 2022.
China's regulatory practices in the field of virtual currencies are essentially strategic measures to reconstruct financial sovereignty in the digital economy era. This innovation in regulatory paradigms not only provides a Chinese solution for global risk prevention but also opens up strategic pathways for the internationalization of the digital yuan. Future developments in regulatory technology will focus on cutting-edge fields such as quantum encryption and artificial intelligence monitoring, promoting the formation of a digital financial governance system that balances security and innovation.
