China’s central bank proposes monitoring Metaverse and NFT

China’s central bank proposes monitoring Metaverse and NFT
China’s crackdown on cryptocurrencies is expanding to include Metaverse and nonfungable (NFT) tokens, the director of the People’s Bank of China (PBoC) recently suggested.

Speaking at the National Financial Security Summit, Gou Wenjun, director of the anti-money laundering (AML) unit at the PBoC, highlighted the risks of leaving new trends in the cryptocurrency ecosystem, such as NFT and Metaverse, unregulated. 

He argued that while people use these digital assets for privacy and wealth appreciation, they are also vulnerable to being used for illegal purposes such as money laundering and tax evasion.

The rapid pace of innovation in the cryptocurrency world calls for higher oversight and risk management requirements, the AML chief said, adding that the insulated nature of crypto, NFT and metaverse-based elements from the real world can be exploited for money laundering.

Suggesting an objective look at the evolution of virtual assets and the development of underlying technologies, Gou suggested “clarifying the allocation of supervisory responsibilities, improving the transparency of virtual assets and their evaluation.”

In a second step, Gou said China should strengthen monitoring and analysis of digital asset transactions. He suggested that banks and payment services that provide fiat-to-crypto gateways should authenticate senders and recipients with real surnames, while improving the ability to identify suspicious transactions.

2/12/2021 – Mr.Advice

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