CHINA’S POLICYMAKERS MAY love the digital yuan, but their attitude towards private cryptocurrencies is much different.
New restrictions expand the crackdown on cryptocurrencies initiated in 2017 that included a ban on Initial Coin Offerings (ICOs). Chinese regulators have now banned financial institutions and payment companies from providing any services related to cryptocurrencies.
Banks and online payment firms were already prescribed from offering customers crypto-related services such as new accounts, registration, trading, clearing, settlement and insurance. To this list is added services not previously covered, such as exchanging bitcoins and other cryptocurrencies into yuan or foreign currencies and including anything crypto-related in wealth management products.
Authorities are concerned about the rise in financial risks as bitcoin’s soaring price has sent speculative crypto trading soaring again. The official word is that ‘virtual currencies are not supported by any real value’.
The latest crackdown effectively ends crypto-related transactions. This Bystander expects the next step to be outright bans on crypto assets.
China Bystander 