- China banned financial institutions offering services related to crypto transactions.
- This is not Beijing’s first ban move against crypto.
China has banned financial institutions and payment firms from offering services related to crypto transactions, according to the Reuters report. Also, warned investors over speculative crypto trading.
This is China’s recent attempt to restrain the burgeoning crypto trading market. Under the ban, some institutions, such as banks and online payment channels, must not offer clients any service that involves crypto. This includes registration, trading, clearing, and settlement. However, three industry bodies explained in a joint statement on Tuesday.
Recently, cryptocurrency 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.
Moreover, China has banned crypto exchanges and initial coin offerings. Nevertheless, China has not barred individuals from holding cryptocurrencies. More so, the institutions must not provide savings, trust, or pledging cryptocurrency service, nor issue financial products related to crypto.
Even more, this move was not Beijing’s first move against crypto. In 2017, China shut down its local cryptocurrency exchanges, smothering a speculative market that had reported for 90% of global Bitcoin (BTC) trading.
In June 2019, the People’s Bank of China released a statement saying it would block access to all domestic and foreign crypto exchanges and Initial Coin Offering websites. However, aiming to clamp down on all cryptocurrency trading with a ban on foreign exchanges.
The statement also highlighted the risks of crypto trading, saying virtual currencies are not supported by real value. Their prices are easily manipulated, and trading contracts are not protected by Chinese law.
Notably, the three industry bodies include the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.