The People’s Bank of China asked various banking entities in the country to stop the provision of services for transactions in virtual currency and to identify customers who operate with bitcoin or other cryptocurrencies.
In this meeting, the new regulation was made clear that all banks and payment institutions must implement the “Notice on the prevention of risks of Bitcoin” and the “Announcement on the prevention of financing risks of the issuance of tokens” , among other regulatory commitments. Thus, these institutions must comply with the identification of clients and “must not provide the opening and registration of accounts for activities related to products or services such as trading, clearing and settlement” of digital assets.
Also, the statement issued by the People’s Bank of China states that “institutions should thoroughly investigate and identify virtual currency exchanges and capital accounts of OTC merchants, and cut the payment link of funds from the transaction in a timely manner. In addition, these entities have to analyze the characteristics of the transactions, improve the monitoring models of abnormal operations and ensure a better identification of those who operate with them.
Later in the letter, it is explained that China’s government agencies consider that activities related to virtual currencies “alter the economic order and normal financial »of the country. This is because, according to the statement, cryptocurrencies and other digital assets generate risks of illegal international transfers of assets, money laundering and other illegal and criminal activities.
The conclave, announced by the People’s Bank of China itself, had the purpose of «fully implementing the relevant decisions and deployments of the Central Committee of the Party and the State Council (of China) , (…) Combat the speculation of Bitcoin and other virtual currency transactions, protect the security of people’s property and maintain financial security and stability “, according to the text itself.
Among the entities that participated in the event , include the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Construction Bank, the Postal Savings Bank, the Industrial Bank and Alipay (China) Network Technology. All of them, as reported by the People’s Bank of China, agreed to collaborate with the request and assured that they will multiply efforts to combat bad practices in this sector.
China strengthens bitcoin regulation
In recent months, the Chinese government has focused on activities related to cryptocurrencies. As explained previously, the State considers that bitcoin and cryptocurrencies in general enhance the proliferation of illegal operations. Thus, for example, the country’s police came to arrest more than 1,000 people for laundering money with cryptocurrencies recently, as reported by CriptoNoticias.
However, not only fraudulent operations have called the attention of the authorities. Other activities related to crypto assets, such as mining, have also been heavily restricted. By Saturday, June 19, there were already five provinces in which cryptocurrency mining was totally prohibited by the State.
