Sunday, February 5, 2023

PBOC Summons Financial Institutions To Impose Tougher Crackdown On Crypto Trading

The People’s Bank of China has recently ordered a few banks and payment institutions in the country to stop offering a wide array of crypto services that include the opening of accounts, processing transactions and settlements. 

While releasing a public statement on Monday, the central bank of China stated that it has asked the financial institutions to crackdown harder on crypto trading.

A month ago, the State Council of China announced the crackdown on Bitcoin mining and trading. In order to implement the regulation, the People’s Bank of China held a meeting with financial institutions in the country including the Agricultural Bank of China (AgBank) and Alipay.

The institutions have been ordered by the central bank to go through the accounts of their clients to identify whether any of them was involved in the crypto-related activity and therefore, promptly cut their payment channels. 

“Speculative trading in virtual currencies roils economic and financial order, spawns the risks of criminal activities such as illegal asset transfers and money laundering, and endangers people’s wealth,” mentioned PBOC in a statement.

A few other financial institutions that were part of this recent meeting include state-owned China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and Postal Savings Bank of China.

According to the reports, when Bitcoin experienced a bull run, it re-opened the doors for speculative trading in China, which allowed the citizens to buy cryptocurrencies using yuan through their bank accounts. 

However, a month ago, three of the associates of the industry stop offering their services for crypto-related activities. Notably, those associates were less powerful than the PBOC.

The central bank of China has recently asked the country’s financial institutions to invest more funds in technologies that could help them better understand not only the crypto-related transactions but also their clients.

Soon after the banks, including AgBank, ICBC, CCB and Alipay, received a notice, they released separate statements specifying that they would surely conduct due diligence on clients to annihilate illegal crypto-related activities and cease suspicious accounts.

The past weeks had been very difficult for the Chinese crypto industry because the country cracked down on major bitcoin hubs, including Sichuan, Xinjiang and Inner Mongolia. The country also banned the social media accounts that were related to cryptocurrencies and even banned the search for major crypto exchanges like Binance, Huobi on and Weibo.

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