Chinese Industry Organizations Reiterate Old Restrictions on Cryptocurrencies
18 May, 2021•2 min read•Regulation
Latest reports from China reveal that self-regulatory bodies have reiterated a ban on financial institutions and payment companies from providing banking services to crypto traders and related entities.
Per the original report, the move stems from high volatility in the crypto market, which reportedly exposes people’s property to risk. In a joint statement by three industry organizations in the country, China claimed that the rise and fall of crypto prices is “disrupting the normal economic and financial order. According to the report, the three industry bodies are the China Banking Association, the National Internet Finance Association of China, and the Clearing Association of China. As per the statement, they believe that cryptocurrencies “are not supported by real value,” plus their prices are easily manipulated. With the restrictions now in force, all financial institutions, including banks and other payment platforms, can’t offer their services to clients that deal with cryptocurrency. Such services include registration, trading, clearing, and settlement. While China has banned banks from servicing crypto entities, investors and traders are not prohibited from getting involved with the asset class. Crypto traders in China just need to find a way to conduct their crypto activities without using banks, which is possible through peer-to-peer channels. Meanwhile, China is not the first country to prohibit financial institutions from servicing crypto exchanges and related firms. Earlier this year, Nigeria’s central bank banned banks from facilitating crypto transactions. Despite the ban, several reports revealed that crypto trading volume in the country continues to surge, thanks to P2P platforms.