Chinese authorities have banned financial institutions and payment companies from offering cryptocurrency-related services to their clients
The National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China have banned financial institutions and payment companies from providing cryptocurrency-related services to their individual and business clients.
According to Reuters, the authorities told institutions, including banks and online payment companies, to steer clear of providing services related to cryptocurrencies. Clients would not be allowed to register, trade, clear, or settle any transactions related to cryptocurrencies with any bank in the country.
The authorities said, “Recently, cryptocurrency 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.”
This latest directive means that financial institutions and payment companies in China would no longer be allowed to provide savings, trust, or pledging services of cryptocurrency. Furthermore, they are banned from issuing financial products related to digital currencies.
The authorities also warned people against trading cryptocurrencies, claiming that it is risky and that cryptos are not supported by any real value. They added that cryptocurrency prices are easily manipulated, and Chinese law doesn’t currently protect investors that trade them.
Chinese authorities banning cryptocurrencies is a familiar trope. Over the past few years, the Chinese government has cracked down on virtually all crypto-related activities except mining. They banned crypto exchanges from operating in the country, forcing most of them to move their headquarters to neighboring countries such as Hong Kong, Malaysia, and Singapore.
China also banned initial coin offerings (ICOs) while several municipalities banned crypto-related events from being hosted in their regions.