China bans firms firms from servicing crypto transactions | Business and Economic News


China’s latest attempt to halt the booming digital trading market has sent crypto prices on the verge of winning.

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

This is China’s latest attempt to curb what is a booming digital trading market. Under the ban, such institutions, including banks and online payment channels, are not required to provide clients with any services involving cryptocurrency, such as registration, trading, clearing and settlement, three industry body said in a joint statement on Tuesday.

“Recently, crypto currency prices have risen and fallen, and speculative cryptocurrency trading has returned, severely violating the security of people’s assets and undermining the normal economic and financial order,” they said in the statement. . The three industry bodies are: the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China.

China bans crypto exchange and initial coin offerings but does not prohibit individuals from controlling cryptocurrency.

Institutions are not required to provide cryptocurrency storage, trust or pledge services, nor issue cryptocurrency-related financial product, the statement also said.

No digital tokens

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

The largest token fell as much as 7.3 percent to $ 40,139 in Asia on Wednesday, continuing a week-long slide sparked by repeated comments by Tesla founder Elon Musk about holding the coin in company. Ether, Dogecoin and last week’s sensation, Internet Computer, also retreated.

The moves are not Beijing’s first move against digital money. In 2017, China shut down local cryptocurrency exchanges, cracking down on a speculative market that accounts for 90 percent of global Bitcoin trading.

In June 2019, the People’s Bank of China issued a statement purporting to block access to all domestic and foreign exchange and Initial Coin Offering websites, aimed at curbing all cryptocurrency trading with prohibition of foreign exchanges.

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





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