China renews battle against cryptocurrency trading
Yuan-denominated virtual-money transactions declined significantly after a crackdown last September, but have seen a resurgence
China on Sunday stepped up its crackdown against cryptocurrency trading, which has recently seen a resurgence after initial coin offering (ICO) was banned last September, according to an article on Financialnews.com.cn, a unit of the People’s Bank of China.
On Sunday evening, Xinhua, citing the PBoC, published a 400-word article to unveil a new round of the fight against cryptocurrencies in China. It said the central bank would adopt a series of regulatory measures to crack down on both domestic and overseas ICOs and virtual-currency transactions, including the banning of relevant businesses and their exchange platforms.
Later the same evening, Financialnews.com.cn published an 1,800-word article of its own to outline the central bank’s thoughts about the latest situation with virtual-money activities in China.
On September 4, 2017, the central bank and six government ministries issued a joint statement that ordered the shutdown of all ICO platforms in China by the end of that month. The results were significant, Financialnews.com.cn said in the article, citing an exclusive source at the central bank.
Yuan-denominated cryptocurrency transactions once accounted for 90% of all similar deals in the world, but now only account for less than 1%, according to the report. The risks of such activities have been significantly reduced.
However, the report said, since the end of last year, some people in the country have turned to offshore Internet platforms to continue participating in ICOs and virtual-money trading.
It said some platforms, mostly based in Japan or Hong Kong, used “over the counter” (OTC) systems to allow individual traders to perform peer-to-peer transactions.
This is why the PBoC has had to adopt new measures, including a ban on all domestic and overseas cryptocurrency trading platforms, to curb such illegal activities, the report said.
It also noted that last year the Communist Party of China’s National Financial Work Conference had emphasized that the finance sector should serve the real economy.
The report said the crackdown against cryptocurrencies was aimed at avoiding financial risks and maintaining financial stability. The central bank will not rule out the possibility of further tightening its rules, depending on the seriousness of the situation in the future.