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China remains strict with its regulations for the crypto market

Photo of: Joseph Stone
by Joseph Stone

By mid-year, China had begun to get tough on the cryptocurrency industry. And the trend is expected to continue, according to a new communication from the country’s central bank.

The People’s Bank of China (PBOC) publication lists the financial institution’s next areas of development. It states that the central bank wants to continue to prevent illegal activities related to digital assets and cryptocurrencies.

As a reminder, cryptocurrency trading has been particularly controlled in the country since 2017: exchanges are thus not allowed to operate in the territory. The Central Bank of China confirms that it wants to continue to “supervise and guide companies and platforms to make full rectifications in compliance with regulatory requirements.”

In particular, on July 30, the People’s Bank of China held a working conference. With the aim of studying the current economic situation, to make important provisions.

“In the seventh point. It was indicated to promote the standardized development of financial services for enterprises. 

The People’s Bank of China (PBoC) congratulated itself for “cracking down on illegal virtual currency activities” earlier this year. And, it said it would continue to supervise financial platforms.

As a reminder, the Chinese government has restricted cryptocurrency trading in the country since 2017. When it banned Chinese financial institutions from dealing with crypto-currencies. Thus, this prevented cryptocurrency exchanges from operating in the country.

As a result, on May 17 of this year, three major Chinese trade associations reconfirmed their commitment to this regulation. Claiming that speculative trading “seriously undermined the security of people’s property. And change the normal economic and financial order.

Specifically, the China Internet Finance Association, China Banking Association, and China Payments and Clearing Association issued a joint statement. Warning the public of the risks of investing in crypto-currencies.

Next, China stepped up its efforts by introducing restrictions on crypto mining to “prevent and control financial risks.” Restrictions on Bitcoin mining continued to roll out across the country throughout June. China has also been particularly tough on cryptocurrency miners. Several provinces have cut off power to mining farms or banned the activity altogether. Miners have been forced into exile elsewhere, which has caused the hash rate of the Bitcoin network to drop sharply. The government should therefore continue to “clean up” the industry, helping to relocate the global hash rate.

This new pressure does not come by chance: China is about to launch its digital yuan on a large scale, and it sees cryptocurrencies as competition. So the government is pushing Bitcoin aside as much as it can, to make room for its digital currency, designed to challenge the hegemony of the dollar king. Traders and miners should therefore continue to suffer successive pressure from Beijing…