Three associations under the Peoples Bank of China (PBOC) issued a joint notice prohibiting companies from engaging in cryptocurrency-related business. This was reported by journalist Colin Wu.
Breaking: Three associations under the Central Bank of China issued a document requiring institutions not to conduct virtualcurrency business, calling on the public not to participate in virtualcurrency, and emphasizing that virtualcurrency transactions are not protected by law.
— Wu Blockchain (@WuBlockchain) May 18, 2021
The document cited by Wu was signed by the Banking Association of China, the Internet Finance Association, and the Payment and Clearing Association. They recommended that citizens refrain from investing in cryptocurrencies and reminded that such operations are not protected by law.
“Digital currency is a special virtual commodity, not linked to monetary authorities. It has no monetary properties and it is not a real currency. Using it as a means of exchange in the market is prohibited,” the notice states.
The measure aims to reduce the risks of cryptocurrency speculation. Companies were required to cease any activity related to digital assets and sever ties with relevant players. In particular, internet platforms were prohibited from displaying such advertisements.
The associations will tighten oversight of market participants. Sanctions will be applied to violators.
China CITIC Bank barred individuals and legal entities from using accounts to buy and sell cryptocurrencies.
In April 2021, China proposed treating cryptocurrencies, such as Bitcoin, investment instruments.