China bans financial companies from engaging in cryptocurrency transactions Business and Economy News


China’s latest attempt to curb an expanding digital commerce market has brought down cryptocurrency prices.

China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions and has warned investors against speculative cryptocurrency trading.

It was China’s last attempt to curb what was a booming digital commerce market. Under the ban, these institutions, including banks and online payment channels, should not offer customers any services involving cryptocurrencies, such as registration, trading, clearing and settlement, three industry agencies said on Tuesday. .

“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative cryptocurrency trading has rebounded, seriously violating people’s property security and disrupting the normal economic and financial order.” they state in the statement. The three industry bodies are: the National Internet Finance Association of China, the Banking Association of China, and the Payment and Clearing Association of China.

China has banned cryptocurrency exchanges and initial coin offerings, but has not banned people from keeping cryptocurrencies.

Institutions should not provide cryptocurrency savings, trust or commitment services, or issue financial products related to cryptocurrency, the statement also said.

No digital tokens

Bitcoin and other major cryptocurrencies fell after the People’s Bank of China issued a statement reiterating that digital tokens cannot be used as a form of payment.

The biggest witness fell as much as 7.3 percent to $ 40,139 in Asia on Wednesday, and continued a week-long slide sparked by back-and-forth comments from Tesla founder Elon Musk on the funds of the currency company. Ether, Dogecoin and last week’s sensation, Internet Computer, also withdrew.

The moves were not Beijing’s first moves against digital currency. In 2017, China closed its local cryptocurrency exchanges, stifling a speculative market that had accounted for 90 percent of global Bitcoin trading.

In June 2019, the People’s Bank of China issued a statement saying it would block access to all domestic and foreign currency exchanges and initial currency supply websites, with the aim of curbing all cryptocurrency exchanges with the ban on foreign exchange.

The statement also highlighted the risks of cryptocurrency trading, saying that virtual currencies “are not backed by real value”, their prices are easily manipulated and trade contracts are not protected by Chinese law.

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