PBOC proposes system to track cryptocurrency transactions

The PBOC’s Center for Monitoring and Analysis of Anti-Money Laundering, led by Gou Wenjun, proposed creating a system to track cryptocurrency transactions as part of tighter regulation, local media report.

“Because virtual assets pose increasingly serious problems for the sovereignty of the national currency, fraud, money laundering and the financing of terrorism, international organisations and governments are tightening oversight of virtual assets,” the official said.

In his view, the risks associated with cryptocurrencies should be addressed on four fronts.

First, Gou Wenjun proposed clarifying the non-financial attributes of virtual assets and improving regulation. He believes their evolution will not stop at “the current versions of cryptocurrencies, NFT and various elements of the metaverse.”

“We must maintain a constant high level of vigilance, look at the evolution of virtual assets and the development of underlying technologies objectively and neutrally,” Gou Wenjun emphasised.

Second, he proposed strengthening monitoring and analysis of operations with virtual assets to understand their essence.

Third, the official says it is necessary to create a system to track cryptocurrency transactions and their scenarios. It should include a system of large-scale address probing using artificial intelligence, machine learning and other technologies to identify the real owners of accounts.

Fourth, Gou Wenjun recommended expanding cooperation and information exchange with foreign financial intelligence agencies “to form international joint forces to combat crimes involving virtual assets.”

As reported, after launched on 24 September a new wave of crackdowns on the crypto industry, the relevant Chinese authorities have begun to study the legal norms for the criminal prosecution of traders and miners.