In a further show of its anti-crypto stance, The People’s Bank of China PBoC, issued a statement today, saying that after a meeting with domestic banks and other financial providers, it has promulgated that all funding channels for crypto OTC desks should be severed.
The recent meeting of banks and mobile service providers, summoned by the PBoC, was to look at the speculative trading activities around crypto. Among the banks present at the meeting were: the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), the Construction Bank of China (CBC), Postal Savings Bank of China, the Industrial Bank, and the mobile payments app AliPay.
The PBoC stated that the speculative trading of crypto assets was detrimental to the equilibrium of the Chinese financial system. This was believed to cause capital outflow across the border as well as to be a risk of money laundering. According to the PBoC statement:
“All banks and payment institutions must strictly implement the "Notice on Preventing Bitcoin Risks" and "Announcement on Preventing Token Issuance Financing Risks" and other regulatory requirements,”
The statement also sought to make the ban on crypto trading complete by saying that banks:
“must analyze the capital transaction characteristics of virtual currency trading hype activities, increase technical input, improve abnormal transaction monitoring models, and ensure that Improve monitoring and identification capabilities; improve internal working mechanisms, clarify the division of labor, compact responsibilities, and ensure that relevant monitoring and handling measures are implemented.”
Not long after the PBoC statement was released, several of the financial institutions released their own notices, reiterating the central bank’s statement and saying that any customers transacted in crypto currencies would have their accounts terminated and would be reported to the authorities.
Since the PBoC had originally banned ICOs and fiat on-ramp channels back in 2017, Chinese investors looking to buy crypto had circumvented the ban by using OTC merchants.
Another big anti crypto move by the Chinese authorities has led to regional government issuing orders to cut off electricity to bitcoin mining facilities in their areas. The total Bitcoin network hash rate has declined 30% as a result of these moves, and some Chinese miners are looking to relocate overseas.
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.