The Chinese government has been tough on cryptocurrencies, and they have now banned financial institutions and payment companies from providing cryptocurrency-related services.
China bans crypto-related services again
China was one of the leading cryptocurrency markets in the world. However, recent policies from the government have seen it lose its place as a leader in the market. The government is now banning cryptocurrency-related services again in the country.
According to a Reuters report, Chinese authorities have banned financial institutions and payment companies from providing crypto-related services. It has also warned investors against speculative cryptocurrency trading. The institutions, including banks and online payment companies, should desist from offering clients services related to cryptocurrencies. As such, clients won’t be able to register, trade, clear, or settle any transactions related to digital currencies.
The statement reads, “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.” The statement was made by the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
Thanks to this latest order, financial institutions must not provide saving, trust, or pledging services of cryptocurrency. Also, they must not issue financial products related to cryptocurrency. Furthermore, the regulating bodies added that cryptocurrency trading is risky and digital currencies are not supported by real value. They maintained that the prices are easily manipulated, and the Chinese law does not protect investors trading contracts.
China has a history of banning cryptocurrencies
This isn’t the first time China is banning cryptocurrency transactions. The Asian country banned cryptocurrency exchanges from operating and also stopped initial coin offerings (ICOs). Furthermore, several municipalities banned cryptocurrency events from taking part in their jurisdictions.
These regulations forced several Chinese exchanges to move their headquarters to regions such as Hong Kong, Singapore, Malaysia, and the Cayman Islands. China’s latest ban hasn’t affected the cryptocurrency market as Bitcoin is still trading above the $43k level. The market is used to China banning cryptocurrencies that it no longer comes as a surprise.