People’s Bank of China Issues Directive Against Cryptos to Institutions

11 July 2021 | Updated: 11 July 2021

Authorities of the People’s Bank of China (PBoC) are on the neck of the cryptocurrency industry once again. This time around, they have issued a notice to local institutions, warning them against providing services to crypto-related companies.

The Chinese government has ramped up its anti-crypto activities in the past few weeks, causing several local crypto companies to look overseas for a friendlier business environment.

The official memo to local institutions included a disclosure that authorities shut down a Beijing-based software company after suspecting that it provided software services for digital currency transactions. The PBoC noted that stringent action was necessary to “prevent and control the risk of speculation in virtual currency transactions, and protect the safety of the public’s assets.” The official statement detailed that:

“Here, we solemnly warn relevant institutions within our jurisdiction not to provide business premises, commercial display, marketing, and paid diversion services for virtual currency-related business activities. Financial institutions and payment institutions within the jurisdiction shall not directly or indirectly provide virtual currency-related services to customers.”

People’s Bank of China Warns Citizens Against Speculative Crypto Trading

The document also extended caution to the Chinese public, advising that they exercise caution and “enhance their risk awareness” when seeking investment opportunities. It warned citizens against engaging in speculative digital currencies and warns about the damaging effects. The document further compelled citizens to report activities and persons violating the laws and regulations related to digital currency transactions.

The Beijing office of the People’s Bank of China warned that:

“Personal bank accounts should be cherished and not used for virtual currency account recharge and withdrawal, purchase and sale-related transaction recharge codes, and transfer of relevant transaction funds, etc., to prevent illegal use and personal information leakage.”

The new development comes a few weeks after the government ramped up its activities against Bitcoin miners across its provinces, which triggered a massive crash in Bitcoin and the crypto market at large. The government also blocked the social media accounts of some prominent Bitcoin advocates.

In a report to CNBC, CEO of Marathon Digital Holdings Fred Thiel noted that:

“China’s government is doing everything they can to ensure that bitcoin (BTC) and other cryptocurrencies disappear from the Chinese financial systems and economy.”

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.