China has been the biggest hub for cryptocurrencies owing to its tech superiority and tech-savvy population. However, seems that the Chinese government is aiming to put a full stop to all of this. It has just banned the country’s financial institutions from providing any services for cryptocurrency transactions. Furthermore, it has also warned investors in doing speculative trades for digital currencies.
As part of the ban, banks, online payment providers or other such financial institutions will not be able to offer cryptocurrency-related services. It includes account registration, trading, clearing, and settling transactions. The diktat comes from three industry bodies, which are the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
The official statement goes as “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.“
In addition, the three-industry body highlighted that the cryptocurrencies “are not supported by real value.”
It’s clear that China is seeing that more and more users are opting for virtual currencies, which has the power to disrupt its fiat currency itself. In fact, China has launched its own CBDC (Central Bank Digital Currency) and this move might be before it rolls out the Digital Yen nationwide.
Worth noting that China has already banned crypto exchanges and ICOs (Initial Coin Offerings) back in 2017. However, it hasn’t banned individual users from owning and transacting cryptocurrencies. It would be interesting to see if the Chinese government will eventually take an extreme step and ban cryptocurrencies outrightly, just like countries like India are planning.