TL;DR breakdown
- China reminds investors of crypto ban.
- Crypto is not a currency allowed in China.
The People’s Bank of China (PBOC) has reiterated its crypto ban today, Tuesday after sharing a warning by its associates on its official WeChat group.
The National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China prompted PBOC’s call after they issued a joint statement on Tuesday where they reiterated the apex bank stance on crypto.
The three group warned crypto investors in the country against trading digital currencies and called it speculative.
They detailed that it infringes on the safety of people’s property and disrupts the normal economic and financial order.
“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,” the three industry bodies said.
Reasons for China’s crypto ban
The association in the joint statement explained why the crypto ban must stay and why the digital assets should be overlooked in China.
Firstly, they point that cryptos are not “real currency” and should not be used as a medium of exchange for goods and services. The Beijing Arbitration Commission last year issued a ruling declaring Bitcoin to be a virtual commodity.
Secondly, the trade associations warned financial institutions and other member organizations not to engage in crypto business transactions. An excerpt of the document specifically addressing internet platforms explains that services and goods are not provided for virtual currencies.
The trade associations also warned retail traders to be wary of the risks involved in crypto investments while also calling on member institutions to abide by existing regulatory provisions regarding digital currencies.
The PBOC placed a ban on crypto in 2017 and token issuance. Strict regulatory concerns around crypto led to several exchanges, Binance, Huobi to mention a few leaving China.
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