China has taken a tougher stand against Cryptocurrencies as it banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.
This is coming as the cryptocurrency market tried to recover from the shock wave sent by Elon Musk’s announcement that Tesla would stop accepting Bitcoin as payment over environmental concerns.
Under the Chinese ban, such institutions, including banks and online payments channels, must not offer clients any service involving cryptocurrency, such as registration, trading, clearing and settlement, three industry bodies said in a joint statement on Tuesday CNBC reported.
The three industry bodies are: the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China.
“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,” they said in the statement.
The risks of trading cryptocurrency were also highlighted in the statement. Virtual currencies “are not supported by real value”, their prices are easily manipulated, and trading contracts are not protected by Chinese law.
China in 2017 shut down its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90% of global bitcoin trading.
In June 2019, a statement issued by the People’s Bank of China said it would block access to all domestic and foreign cryptocurrency exchanges and Initial Coin Offering websites.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.