Has China banned cryptocurrency?
China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions.
They have also warned investors against speculative crypto trading.
Under the ban, these institutions, like banks and online payments channels, must not offer clients any service involving cryptocurrency.
This includes registration, trading, clearing and settlement
Although China has banned crypto exchanges and initial coin offerings – they have not barred individuals from holding cryptocurrencies.
The moves were not Beijing’s first moves against digital currency.
In 2017, China shut down its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90% of global bitcoin trading.
Crypto markets surged over the past year as interest increased among individual investors and well-known companies in the financial world.
Well-known mainstream companies such as PayPal, Mastercard and Facebook have backed cryptocurrencies.
Surges came off the back of Coinbase going public in the US – it is the first cryptocurrency exchange to list its shares on a stock exchange.
It’s seen as a major milestone and another sign of cryptocurrency becoming mainstream but its shares are now trading below the initial debut price.
The market drops highlight how volatile cryptocurrencies are, and took a big blow in April when Turkey’s central bank banned the use of cryptocurrencies for purchases.
Now it’s expected that an even worse hit will be caused by China’s ban.
What has China said?
In June 2019, the People’s Bank of China issued a statement saying it would block access to all domestic and foreign cryptocurrency exchanges and Initial Coin Offering websites.
The aim was to clamp down on all cryptocurrency trading with a ban on foreign exchanges.
The statement also highlighted the risks of cryptocurrency trading, saying virtual currencies “are not supported by real value”.
They said their prices are easily manipulated, and trading contracts are not protected by Chinese law.
This week three industry bodies released a joint statement saying: “Recently, crypto currency 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,”