Why is virtual currency not allowed in the country?
Illegal cryptocurrencies have already perfectly circumvented foreign exchange controls to some extent. If cryptocurrencies were allowed legally, it could even directly nullify the Golden Tax Phase IV.
If you sell a house in a first-tier city and get 5 million cash, you want to exchange this money into 700,000 US dollars to transfer abroad.
The bank has a purchasing limit of 50,000, and the remittance is also limited to 50,000, a double insurance, which would take 14 years to complete the transfer.
If you use someone else's quota to exchange for cash in US dollars and smuggle it out, carrying more than 5,000 personally will be regulated.
If you use someone else's quota to send money to your overseas card, you will be monitored if there are more than 3 people involved. If you want to take RMB out of the country and then exchange it for foreign currency, an individual can carry no more than 20,000 at a time.
If you want to remit RMB abroad, sorry, you can't send out a single cent. All the legal paths you can imagine are blocked, so back to cryptocurrencies.
If there are no quota limitations, it perfectly circumvents them. If there are quota restrictions, assuming a reference foreign currency of 50,000 US dollars, then you can utilize other people's quotas. 14 people can help you exchange 5 million RMB, then put it on a USB drive and take it abroad. As long as you don’t say anything, no one will know.
In summary: cryptocurrencies are, in a sense, a general equivalent close to precious metals. They have properties similar to precious metals: decentralization and anonymous transactions, which leads to a completely uncontrollable state for centralized national finances.
With the progress of the times, precious metals gradually withdraw from the circulation field, mainly due to physical laws at play; compared to fiat currency, they are too inconvenient. However, cryptocurrencies are not constrained by physical laws, making them almost as convenient as payment platforms like Alipay and PayPal.
Even if we set aside the issue of foreign exchange controls for now, if everyone were to use cryptocurrencies, Golden Tax Phase IV would become a joke. Who can bear that?
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