People’s Bank of China, along with other government departments, released a warning on September 24 that made all cryptocurrency activities illegal in the Country. They specifically warn that providing online virtual currency exchange services for domestic residents is also considered an illegal financial activity. Also according to the notice, a series of measures will be introduced to strengthen regulation. In the meantime, however, financial institutions and non-bank payment institutions are banned from offering services for commercial activities related to cryptocurrencies.
“All commercial activities related to virtual currencies are illegal and should be strictly prohibited and repressed, in compliance with the law “, reads the notice. In order to “build a system of prevention and disposal of the risks of speculation in virtual currency transactions “.
China’s policies on the matter are consistent – as it has underlined the People’s Bank of China – reiterating that these currencies do not have the same legal status as traditional ones and cannot be circulated on the market.
The central bank motivated its ban saying that, in recent years, the rampant expansion of cryptocurrencies such as Bitcoin and Ethereum has disrupted the economic and financial order, leading to criminal activities such as money laundering and seriously endangering security of private property. China has therefore taken a hard line towards virtual currencies. Also on September 24, the National Development and Reform Commission, the country’s top economic planner, issued a warning to step up repression measures against virtual-currency mining.
