Economic Risks Associated with Non-Statutory Digital Currencies and Regulatory Measures

The development of blockchain technology provides a technical possibility for the emergence of non-statutory digital currencies. Non-statutory digital currencies are digital currencies issued by organizations of entities other than states, and mainly contain unstable coins such as bitcoin and ethereum issued by online communities, as well as stable coins such as libracoin and tadcoin issued by internet companies. Non-statutory digital currencies have essential attributes such as demonetization, price bubbles, de-regulation, and decentralization and re-centralization. And the total amount of non-statutory digital currencies is constant, which is essentially an artificially created scarcity at the technical level. When non-statutory digital currencies transmit their own risks to the financial industry and the real economy, they can create multi-dimensional risks, particularly affecting the price of computer hardware and energy consumption. In this regard, China should continue to strengthen the supervision and regulation of non-statutory digital currencies, impose a complete ban on non-statutory digital currency production activities and transactions, shut down electronic mining farms, prohibit virtual currency mining activities, and increase the regulation of the sale of graphic cards; shut down domestic digital currency exchanges, and enhance the effectiveness of the management of the foreign exchange bureau, so as to avoid the further spread of economic risks.