aljazeera.com
Economy|Business and Economy
China bans finance firms from servicing crypto transactions
China’s latest attempt to clampdown on a burgeoning digital trading market has sent crypto prices hurtling down.
In the last few years China has undertaken a handful of steps to curb the digital currency [File: Angel Garcia/Bloomberg]
19 May 2021
China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions and warned investors against speculative crypto trading.
It was China’s latest attempt to clamp down on what was a burgeoning digital trading market. Under the ban, such institutions, including banks and online payments channels, must not offer clients any service involving cryptocurrencies, such as registration, trading, clearing and settlement, three industry bodies said in a joint statement on Tuesday.
“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting 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 has banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies.
The institutions must not provide saving, trust or pledging services of cryptocurrency, nor issue financial product related to cryptocurrency, the statement also said.
No digital tokens
Bitcoin and other main cryptocurrencies slumped after the People’s Bank of China conveyed 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 Tesla founder Elon Musk’s back-and-forth comments on the company’s holdings of the coin. Ether, Dogecoin and last week’s sensation, Internet Computer, also retreated.
The moves were not Beijing’s first moves against digital currency. In 2017, China shut down its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90 percent of global Bitcoin trading.
In June 2019, the People’s Bank of China issued a statement saying it would block access to all domestic and foreign cryptocurrency exchanges and Initial Coin Offering websites, aiming to clamp down on all cryptocurrency trading with a ban on foreign exchanges.
The statement also highlighted the risks of cryptocurrency trading, saying virtual currencies “are not supported by real value”, their prices are easily manipulated, and trading contracts are not protected by Chinese law.
SOURCE: NEWS AGENCIES
RELATED
Musk is no longer world’s richest or even second-richest person
Tesla chief Elon Musk lost his spot as the world’s second-richest person on the Bloomberg Billionaires Index.
18 May 2021
Who let the Doge out? Crypto frenzy crashes Robinhood app
Rallies defied easy explanation and continued a trend that’s seen value of all digital tokens surge past $2.25 trillion.
4 May 2021
These Iranian woman are crushing it in crypto
From teaching to trading to the C-suite, more women are making their mark on Iran’s burgeoning crypto scene.
14 May 2021
How much lower could Bitcoin go?
Some Bitcoin watchers on Wall Street see more losses ahead for the world’s largest cryptocurrency.
18 May 2021
MORE FROM ECONOMY
Apple employee, who was vocal on discrimination, fired
Fire erupts at Kuwait oil refinery, injuries reported
Thousands protest in El Salvador against Bukele government
Netflix values its megahit show Squid Game at $900m
MOST READ
Two Hindu men killed, temples vandalised in Bangladesh violence
Taliban says Afghan girls will return to secondary schools soon
Cloth vs N95: Which coronavirus mask should you wear?
Shooting in Syria could mark new phase in Israeli campaign
Follow Al Jazeera English:
© 2021 Al Jazeera Media Network