In a regulatory action announced on September 15 but posted on the People’s Bank of China website today, the Chinese government will be tougher against cryptocurrency transactions through foreign exchange and mining. Although the measures were overturned by Vice Premier Liu Hare in May and the ban on domestic business in 2017, the new notice clarifies the government’s priorities while keeping the punishment for violating the law completely opaque.
From an English translation of the notification, the government promises to “strengthen the management of Internet information content and access to virtual currency”,[ing] Stop illegal financial activities related to virtual currency. “
“Recently, the promotion of virtual currency trading has increased, disrupting economic and financial discipline, and engaging in illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes and money laundering, and seriously endangering the security of human resources,” said People’s Bank of China. “Virtual currency does not have the same legal status as legal tender.”
Previously, international cryptocurrency trading platforms were aware that China-based users were allowed to enter a complex legal gray area due to domestic restrictions. While the new notice seeks to crack down on mining, the Chinese government makes clear that it will eliminate and punish such actions as much as possible. The government’s regulatory measures over the past four years have turned China away from a huge mining center.
“The notice that has come is somewhat terribly broad,” said Carmen Lucero, a colleague at Yale Law School’s Paul Sai China Center. “One reason it’s potentially different [than previous crackdowns] Lucaro said this is the actor involved in the recent crackdown language. “This notice” threatens to take action by the most powerful regulators and the most influential people … who may force people to change their behavior or lock them up for breaking certain rules. “
It also makes exceptional predictions for its own digital yuan; Currencies issued by “non-financial authorities” are invalid, but currencies issued by monetary authorities (i.e., digital yuan) are allowed. China’s new digital currency will “enable Beijing to track costs in real time,” reports The The Wall Street Journal. It goes without saying that the digital yuan does not offer the same privacy benefits as bitcoin, as the currency issued by the central bank will give the government the ability to better monitor the financial transactions of its customers.
The PBOC has published a detailed announcement on its website stating that the illegal wide range of crypto related businesses such as fiat OTC, central trade / clearance etc.
This was expected from the VP’s memo for the trading party after mining was completely banned https://t.co/EdlI8XzFg0
– Dove “Rage the Fiat” One ???????? (Ove Daviwan) September 24, 2021
But it may not actually change too much that the regulator writing was already on the wall. Bloomberg Report:
Chinese officials are going to stop crypto trading with fraud, money laundering and the use of excess energy. China already has rules that prohibit banks from providing crypto-related services. To get such rules, traders have resorted to over-the-counter platforms and offshore exchanges.
Ganesh Bishwanath Natraj, assistant professor of finance at Warwick Business School, said, “China’s ban on all cryptocurrency trading activities will have some short-term effects on currency valuations, but the long-term effects may be nuted.”
Most of the Western media is failing to portray accurately, that is, to some extent, it Groundhog DayIna China tries it almost every year, and of course gives her hints to crack the whip every few months. The renewed power of regulators began this past spring, at a time when some local governments were pushing for a halt to mining activities. Earlier, in 2019, Chinese regulators had crypto mining on their industry wish list (some even led to the closure of mining activities), and two years earlier, in 2017, China banned domestic exchange.
Nevertheless, there is much to be concerned about this new notice, especially as it specifically mentions a breach of public order or good manners. “One of the most common sections you will see in Chinese law is public order,” Lucaro said
Meanwhile, in El Salvador, you can now pay for fry at McDonald’s with Bitcoin, and the UAE legalized crypto trading in the Dubai Free Zone on Wednesday. Although the Chinese Communist Party sees crypto as a threat to suppress it, many other foreign governments have paved the way for the upcoming world order, as many people around the world welcome crypto as a technology of liberation.