Three associates of the People’s Bank of China (PBOC), the Chinese central bank has issued a document prohibiting institutions and businesses from engaging in any form of virtual currency transactions. The latest set of regulatory paperwork ban payment service providers and financial institutions from offering any form of service involving cryptocurrency transactions. The three associate bodies that issued the document include the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
Breaking: Three associations under the Central Bank of China issued a document requiring institutions not to conduct virtualcurrency business, calling on the public not to participate in virtualcurrency, and emphasizing that virtualcurrency transactions are not protected by law.
— Wu Blockchain (@WuBlockchain) May 18, 2021
The official document read,
“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,”
The issued document highlighted that virtual currency trading is banned in the country and is not protected by law. The warning comes at a time of the growing popularity of altcoins in the country and rising investment interest.
Even though cryptocurrency trading in Fiat was banned several years ago in the country, there was no law prohibiting crypto-to-crypto trading and during the bull season, it has peaked to new highs, thus attracting the attention of the authorities.
China Always had Love-Hate Relationship With Cryptocurrencies
China was among the first nations to ban crypto trading citing a threat to their financial sovereignty, at the same time they also started working towards their national digital currency as early as 2014 which is on the verge of a large-scale launch now. While many other countries are either discussing launching a national digital currency or have just started the development, the Chinese Digital Yuan is currently being tested across multiple provinces in hundreds of pilot programs.
In 2019 the Chinese President praised blockchain and even called for its accelerated adoption and later the national media even praised Bitcoin, but soon after it made a u-turn claiming BTC has many flaws which would be filled by Digital Yuan. China is also the epic center for Bitcoin mining making it crucial for the Bitcoin ecosystem despite threats from the government of potentially banning BTC mining in the country.