Key message: The PBoC recently convened a meeting involving the country’s major lenders (Industrial and Commercial Bank of China and Agricultural Bank of China) and payment platforms (Alipay), urging them to stop providing cryptocurrency-related services. The statement was subsequently rescinded.
The PBoC and the cryptocurrency ban
In the statement, the PBoC summarized the directive to all banks and payment institutions to implement the “BTC Risk Prevention Notice” and the “Token Issuance Financing Risk Prevention Notice.” This includes compliance with customer identification obligations and a ban on opening accounts for cryptocurrency trading. In addition to these regulations, institutions still need to comprehensively investigate and identify cryptocurrency and OTC capital accounts and then cut off connections for payments in a timely manner.
The PBoC statement also said that trading activities in virtual currencies disrupt normal economic and financial order. It also dropped the already known reason about the risk of criminal activity. Bitcoin dropped as much as 10% after the initial release of the statement. This is yet another crackdown on cryptocurrencies in an effort to suppress the digital currencies. This regulation added to the ban on cryptocurrency offerings and the ban on mining in some provinces in China.