People Bank’s of China announces further crackdown on crypto

    01 Sep 2021

    The People’s Bank of China once again asserted its crypto crackdown stance at a recent media briefing. The Central Bank stated that virtual currencies like Bitcoin can’t compete with legal tender in the nation. The bank officials argued that cryptocurrencies are not backed by any real value.

    According to local media, Yin Yuping, deputy head of the Financial Services Consumer Protection Department at the PBOC, has urged citizens to protect their pockets because Bitcoin is not legal tender and has no real value, the People’s Daily reports. According to him, crypto transactions are just “pure hype,” so they should “stay away” from them.

    “In response to a possible increase in the number of cryptocurrency transactions, the Central Bank, together with relevant departments, will identify foreign cryptocurrency exchanges and local traders and block and take measures against corporate websites, applications, and channels,” he stated.

    Yin Youping also disclosed the Bank’s future strategy. He stated that the central bank’s next step is to set up a normalized working mechanism, accompanied by a high-pressure situation. Additionally, Youping emphasized that the nationwide crypto crackdown will continue. He further requested the general public to promptly report if they come across any clues concerning illegal fund-raising.

    The institution also plans to crack down on the space by blocking crypto trading websites, applications, and corporate channels.

    By the report of the Joint Conference to Deal with Illegal Fund Raising, PBoC actively cooperates with the lead department of the China Banking and Insurance Regulatory Commission.

    As a result of this collaboration, the regulator created systems aiming for the monitoring, early warning, publicity, education, and overall combating of illegal fundraisings powered by cryptocurrencies and blockchains.

    While China is banning crypto out, its central bank digital currency (CBDC) should be in use soon. Although many look at it as a progressive, technical move, there are some arguing in favor of China’s Digital Yuan being a threat to freedom.

    For instance, a recent blog authored by James A. Dorn claimed,

    “In authoritarian societies, central bank money in digital form could become an additional instrument of government control over citizens rather than just a convenient, safe, and stable medium of exchange.”

    Worth noting, however, that China is also introducing several use-cases for its e-CNY. In public transport, for instance. These applications are unlikely to be ignored.

    Although the PBoC has strongly warned the public about cryptos, the asset class is yet to be fully and legally banned. Even so, Chinese traders may want to manage their risks.

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