A call to crackdown on bribery using the use of cryptocurrency and other forms of electronic payment has appeared on the website of China’s Legal Daily. The publication cited a number of legal scholars who participated in the annual China Integrity and Legal Research Association meeting, where punishing new forms of corruption was a major topic.
The Jan. 1 issue of Legal Daily, which is published by the Chinese Communist Party (CCP) Central Commission for Political and Legal Affairs, quoted Hebei University Law School associate professor Zhao Xuejun as saying virtual currency and electronic gift cards have become “hidden channels” for bribery as cards and digital currencies in “cold storage” devices that can be carried abroad for redemption.
Zhao continued that the CCP is fighting corruption with “unprecedented intensity.”
#Chinese rulers have long used campaigns against corruption to sideline rivals and consolidate power. #XiJinping is increasingly tying his authority to a new variation: a #purge that never ends. https://t.co/4H33FccjTZ via @WSJ
— CryptoPet22 (@CryptoPet22) January 1, 2024
Wuhan University Law School professor Mo Hongxian mentioned Bitcoin (BTC) by name and said virtual currencies’ anonymity and difficult traceability “provide natural convenience for illegal and criminal activities.” Even though they are not recognized in China, transactions with virtual currencies require judicial attention, he added.
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The article concluded, in translation:
“We need to improve the legal and regulatory system for punishing new types of corruption, expand the scope of bribery crimes […] and strengthen supervision information in areas where new types of corruption are prone to occur.”
The article comes less than a week after two state agencies — the Supreme People’s Procuratorate and State Administration of Foreign Exchange — issued a warning to officials against the use of stablecoin Tether (USDT) as an intermediary currency in foreign exchange transactions with the yuan. Such transactions are illegal.
Despite the ban on cryptocurrencies, China has embraced blockchain technology for purposes such as identity verification. In addition, its e-CNY central bank digital currency, although still in the pilot stage, is highly developed. Despite limited geographic distribution, the digital yuan had been used in transactions worth almost $250 billion in China as of June 2023 and in commodities sales internationally.
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