China: Central Bank Warns Firms Against Assisting Crypto-Related Businesses

Published July 7th, 2021 - 09:30 GMT
China: Central Bank Warns Firms Against Assisting Crypto-Related Businesses
Beijing has turned a sharp eye on cryptocurrency in recent months as it widens its regulatory crackdown on the tech sector. (Shutterstock)

Cryptocurrency trading is banned in China, and authorities have recently closed mines and warned banks to halt related transactions.

China's central bank has warned companies against assisting cryptocurrency-related businesses as it shut down a software firm over suspected involvement in digital currency transactions.

Beijing has turned a sharp eye on cryptocurrency in recent months as it widens its regulatory crackdown on the tech sector.

Cryptocurrency trading is banned in China, and authorities have recently closed mines and warned banks to halt related transactions.

On Tuesday, a Beijing office of the central bank ordered the closure of software company Beijing Qudao Cultural Development, alleging it had been involved in providing software services for cryptocurrency transactions.

The move was necessary "to prevent and control the risk of speculation in virtual currency transactions, and protect the safety of the public's assets", it said in a statement.

The bank also warned organisations not to "provide premises, commercial display, advertising... and other services for cryptocurrency-related business activities".

Financial and payment institutions are instructed not to provide cryptocurrency-related services to customers.

Crypto crackdown
 

The announcement comes shortly after provinces including Sichuan, Inner Mongolia and Qinghai shut down crypto mines – causing miners to look abroad – and follows an earlier warning for banks and a payment giant to halt crypto-related transactions.

Last month, bitcoin tumbled after China's mining ban in southwestern Sichuan.

China is in the middle of a wide-ranging regulatory crackdown on its fintech sector, whose biggest players – including Alibaba and Tencent – have been hit with big fines after being accused of monopolistic practices.

Promoters of cryptocurrencies say they allow anonymity and flexibility, but Chinese regulators warn that might aid money-laundering or other crimes.

Regulators tightened prohibitions against handling cryptocurrencies in 2017 and publicly reminded banks about their potential risks in May, possibly reflecting concern cryptocurrency mining and trading was continuing.

The Chinese central bank is developing an electronic version of the country's yuan that could be tracked and controlled by Beijing.


Copyright © 2021 TRT World

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