China has banned financial establishments and payment firms from offering services related to cryptocurrency transactions, and has informed investors against speculative crypto trading. It was China’s latest aim to clamp down on what was a burgeoning digital trading market. By this ban, such establishments, including banks and online payments channels, must not provide clients any service involving cryptocurrency, such as registration, trading, clearing and settlement, three industry bodies said in a joint statement on Tuesday.
“Recently, crypto currency prices have increased so much and plummeted, and contemplative trading of cryptocurrency has been banned again, seriously infringing on the safety of people’s assets and disrupting the normal economic and financial order,” they said in the statement.
China has banned crypto exchanges and initial coin presantins but has not barred individuals from holding cryptocurrencies. The establishments must not provide saving, trust or pledging services of cryptocurrency, nor issue financial product related to cryptocurrency, the statement also said.
The moves were not Beijing’s first moves against cryptocurrency. In 2017, China closed its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90% of world’s bitcoin trading.
In June 2019, the People’s Bank of China published a statement that is about it would block access to all indoor and foreign cryptocurrency exchanges and Initial Coin Offering websites, pointing to clamp down on all cryptocurrency trading with a ban on foreign exchanges.
This declaration also highlighted the risks of cryptocurrency trading, saying virtual currencies “are not supported by real value”, their prices are easily changed, and trading settlements aren’t backed up by Chinese law.