Timely regulation of digital currency market

On Monday, the People's Bank of China, the nation's central bank, said it had urged a number of banks and financial institutions to stop services related to cryptocurrency trade and speculative investment.

The banks involved, such as the Industrial and Commercial Bank of China, the Agricultural Bank of China, and Alipay, responded saying they strictly prohibit any agency or individual from trading in virtual currency through their agencies and will suspend the accounts of people who are found doing so.

Partly as a result, the price of Bitcoin dropped to $31,333 on Monday, the lowest in two weeks. The price of other cryptocurrencies also dropped.

Virtual currencies thrive on decentralization and secret trade. They thus lack the stable value of true currencies and can easily become tools for illegal activities such as money laundering.

Besides, they have their own rules and can escape scrutiny by monitoring agencies. Many criminal gangs use virtual currencies to move their properties across borders, turn their illegal money into legal tender, or even sell illegal financial products.

When hackers remotely control a computer containing essential information, they always ask the victim to pay in virtual currency, which cannot be easily tracked.

As the PBOC pointed out, speculation on virtual currencies has disturbed the normal financial order and harms the safety of people's property. A crackdown is very much called for; actually, several have been carried out in recent years.

While driving virtual currencies out of the market, the PBOC is also piloting the digital renminbi in several cities, which has performed well and is expected to expand to more cities and provinces.

The sovereignty of the digital currency will help provide a stable tool for the digital economy. That, in turn, will help regulate property ownership in the digital world. Only with a proper sovereign digital currency, such as the digital renminbi, can there be order in the digital economy. Hopefully, the PBOC's move will regulate the digital currency market and help it prosper.