The People’s Bank of China makes all crypto-related transactions illegal
China finally expanded its crackdown on cryptocurrencies beyond the mining industry.The People’s Bank of China (PBOC) today Announce All transactions involving virtual currencies-with the exception of one major exception that we will discuss later-are illegal.
The People’s Bank of China is releasing New encryption related rules In June, “virtual currency trading speculation disrupts the normal economic and financial order, breeds the risks of illegal cross-border asset transfers, money laundering and other illegal and criminal activities, and seriously infringes the people’s property safety.”
However, most of the Chinese government Attention gone Cryptocurrency mining operations that have been banned in various provinces All over the countryBut it now appears that the People’s Bank of China is completing the work it started three months ago, and the regulator issued a broad statement, partly as follows:
“Virtual currency does not have the same legal status as legal currency. Bitcoin, Ethereum and [Tether] It has the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed accounts or similar technologies, and exists in digital form. They are illegal and should not and cannot be used as currency in the market. “
It also stated that “commercial activities related to virtual currency are illegal financial activities” and that “the provision of services by overseas virtual currency exchanges to Chinese residents through the Internet is also an illegal financial activity” and “there is a legal risk”. In virtual currency investment transactions. “
The statement also repeatedly mentioned that the People’s Bank of China intends to cooperate with other Chinese regulatory agencies and law enforcement agencies to “severely crack down” on financial and other illegal activities related to virtual currencies. It also wants to restrict access to online information about the use of these currencies.
CoinDesk Report This is the first statement of the People’s Bank of China specifically mentioning Tether, a popular stable currency whose value is linked to the U.S. dollar and Bitcoin and Ethereum. Prices of the latter two fell sharply (4.2% BitcoinSituation and a 7.1% drop ether‘s) In accordance with the statement of the People’s Bank of China.
But it is worth noting that not all virtual currencies will be affected by the new restrictions of the People’s Bank of China. There is one major exception: the digital renminbi known as e-CNY. These new restrictions mean that there will be no real competition for the electronic renminbi, whether it comes from cryptocurrencies such as Bitcoin or stable currencies such as Tether, as in China.
People’s Bank of China Announced in July Since its debut, e-CNY has completed more than 70.7 million transactions with a total value of 5.3 billion US dollars (34.5 billion yuan). This makes China’s efforts far ahead of similar central bank-issued currencies, and many countries have already adopted this approach. just began Explore carefully Recent months.
Of course, the promotion of state-backed virtual currencies is not an official motivation to crack down on cryptocurrencies.On the contrary, Chinese leaders have repeatedly stated Environmental issues Leading them to shut down mining operations, in the case of the People’s Bank of China, cryptocurrency disrupted the country’s financial structure.
However, it would not be surprising if the new regulations of the People’s Bank of China announced that the electronic renminbi would be launched in more regions soon, or suddenly and surprisingly become more popular after this announcement.