China is cracking down on cryptocurrencies by banning institutions from using them to provide services, but this is nothing new. China banned Bitcoin for the first time in 2013.
On Tuesday, May 18, the Chinese government reissued regulations prohibiting financial institutions and payment companies from providing services related to cryptocurrencies or cryptocurrencies. Cryptocurrencies such as Bitcoin are decentralized digital currencies that have gained popularity in recent years as a potential alternative to paper currencies.
Since China’s repeated currency restrictions, there has been confusion online about what exactly that means for crypto owners.
Has China completely banned cryptocurrencies?
Source of information
The Chinese government has banned Chinese cryptocurrency transactions, and financial institutions and settlement companies cannot accept any cryptocurrencies domestically. However, it is unclear how citizens will be regulated when traveling abroad for trade.
What we found
Chinese have been banned from trading cryptocurrencies for years, Melav Ozile told VERIFY.
“I always say that China is a very interesting place in the world for everything about cryptocurrencies and blockchain, while they invest a lot of money, time, effort and heart in developing blockchain. You can see that, “said Ozile.
“When it comes to technology, they’re ahead of the curve. It’s a very interesting place given how they look at blockchain space. Technology is yes, trade is no,” she said. I added. She said most major virtual mining businesses started in China, even though China first banned Bitcoin financial transactions in 2013.
The CSRC’s Bitcoin Risk Prevention Notice states that Bitcoin has no centralized issuer, unlimited total amount, unlimited use and anonymity by geographic region, and therefore Chinese regulators. Concludes that Bitcoin does not have the same legal status as currency, “and should not be used as currency in the market.”
In May, the China Internet Financial Association said, “Recently, the price of cryptocurrencies has skyrocketed and plummeted, speculation of cryptocurrency trading has rebounded, seriously invading people’s property security and disrupting the normal economy and economy Financial order ”
According to Coinbase, the value of Bitcoin fell by about 34% in May.
China is testing its own form of digital currency, the Digital RMB. On June 1, the Beijing Regional Financial Supervisory Commission announced that it would provide 40 million digital yuan in the latest currency test. China is reportedly hoping to launch a currency form prior to the 2022 Beijing Winter Olympics.
Winston Ma said VERIFY cryptocurrencies have not yet been clearly defined in China’s legal system. China has banned crypto exchanges and initial coin offerings, but has not banned individuals from owning cryptocurrencies, Ma said. In the May announcement, in addition to reiterating the ban on cryptocurrencies as a whole, a new crackdown on mining operations has begun.
“The latest crackdown is by the State Council’s Financial Stability Commission, led by Deputy Prime Minister Liu He. It is China’s top-level financial regulator and has vowed to crack down on cryptocurrency mining and trading activities. It is expected that new regulations will be issued by each ministry to better define and regulate the mining, holding and trading of citizens’ cryptocurrencies. ”
Mr Ozile said he hopes the mining business will withdraw from China in the near future as a result of new regulations on mining. Short-term effects include slowing down hash rates or mining, which can cause market volatility.
Mr. Ma told VERIFY: “In addition to the issue of market volatility, carbon neutrality is also an important consideration. According to a recent survey by Chinese scientists, this Chinese emission is Czech. It points out that it will exceed the total annual greenhouse gas emissions of some smaller countries such as the Republic and Qatar.
According to Ozair, the industry is constantly evolving and difficult to regulate.
“Regulators around the world are already thinking broadly about the handling of cryptocurrencies. How can we trade? What kind of regulations should we put in place? It’s evolving. I think it will take time. Technology is competing and regulators are moving slowly like snails, “said Ozile.
China is not the only country that regulates cryptocurrencies. In April, the Central Bank of the Republic of Turkey announced that it would ban the use of cryptocurrencies as payments.
Other VERIFY articles: No, the U.S. government cannot close cryptocurrencies
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Is China Banning Cryptocurrencies?
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