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The PBOC has announced that all cryptocurrency transactions are illegal 

The PBOC has announced that all cryptocurrency transactions are illegal 

On Friday China’s central bank issued a statement that says all crypto-related transactions are now banned, further reinforcing its tough stance on cryptocurrency. The “Notice on Further Preventing and Disposing of the Risks of Hype in Virtual Currency Transactions" outlines all the crypto services that are now illegal in China.

The notice set out the central bank’s harshest directive yet, which effectively bans all crypto services including offering trading, order matching, token issuance and derivatives for virtual currencies.

“Cracking down on the speculation of virtual currency transactions is an important decision and deployment made by the Party Central Committee and the State Council. It is an inevitable requirement for the implementation of the people-centered development concept and the implementation of the overall national security concept.”

While The PBOC has made similar notices and directives over the past couple of years, this most recent notice is its most clear in terms of its regulatory stance on crypto. Earlier this year China announced a tough crackdown on crypto mining, leading to a mass exodus of Chinese crypto mining companies relocating abroad. 

Following the announcement, the price of Bitcoin dropped by as much as  5%, with other cryptocurrencies also experiencing a slump. 

The notice also provided an insight into how the PBOC and other regulatory bodies plan to crack down on illegal cryptocurrency activities,  through the implementation of the notice, and “severely” cracking down on “illegal financial activities and illegal criminal activities related to virtual currencies.

Despite the cryptocurrency mining ban that took effect in July, a number of cryptocurrency mining companies have continued to participate in cryptocurrency trading and mining. According to a statement in August by the Shenzhen branch of the PBoC, 46 companies were suspected of being involved with illegal crypto trading, with 11 being shut down as the result of the investigation. 

The continuation of cryptocurrency related activities through a number of various loopholes, and illegal activity, is likely responsible for the latest harsh directive by the PBOC, addressing and explicitly stating that any crypto-related activity is illegal.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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