A recent paper published in the Journal of East China University of Political Science and Law has sparked a crucial conversation about the regulation of virtual currencies. The authors argue that while prohibition-style regulation has effectively prevented risks at certain stages, the changing market and international regulatory environment necessitate its optimization and adjustment.

The paper suggests that approved domestic financial institutions should be allowed to engage in specific virtual currency businesses, such as the Renminbi stablecoin, to promote financial innovation. This approach would not only enhance the stability and security of the financial system but also foster a more dynamic and competitive market.

The authors emphasize that the current regulatory framework is no longer sufficient to address the evolving needs of the virtual currency market. They propose a more nuanced approach that balances risk management with the need for innovation and growth.

In conclusion, the paper highlights the urgent need for regulatory reform in the virtual currency space. By optimizing and adjusting the current regulatory framework, policymakers can create a more conducive environment for financial innovation and growth, while also ensuring the stability and security of the financial system.