China has barred financial institutions and payments companies from providing services related to cryptocurrency transactions.
National Internet Finance Association of China, China Banking Association, and Payment and Clearing Association of China said that they should not be involved in transactions dealing with cryptocurrencies. These three state banks of China issued a combined statement saying that “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 also stated that the institution must not provide savings and issue financial products related to cryptocurrencies.
China has barred initial coin offerings and cryptocurrency exchanges but not banned individuals from holding cryptocurrencies.
The statement also highlighted the risks of cryptocurrency trading, stating “virtual currencies are not supported by real value”, their prices are easily manipulated, and trading contracts are not protected by Chinese law.
Back in 2017, China banned the local cryptocurrency exchanges, and in 2019 People’s Bank of China blocked the access of domestic investors to cryptocurrency exchanges and ICO sites abroad
While it is said that China is testing its own central bank digital currency, the digital yuan