China Bans Finance Companies Offering Crypto Payment Services

China Bans Finance Companies Offering Crypto Payment Services
May 18
16:03 2021

The Chinese government-affiliated bodies have called for a ban on all financial enterprises and payment services providers (PSPs) who facilitate cryptocurrency trade transactions. The government’s announcement also has strict warnings for investors involved in speculative crypto trading. 

According to the latest regulatory ban, Chinese financial institutions which includes both banks and digital payment companies should cut off all ties from clients who seek cryptocurrency-related services. 

In a statement to the press, a joint statement by three regulatory bodies raised concerns about the highly volatile nature of the crypto market and said that it has led to an unprecedented rise in speculative trading. They have found the phenomenon in the crypto market to be “seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”

The statement also said because the cryptocurrencies are not backed by any real value, the prices can be manipulated, therefore, such promises and trust or pledging of crypto have no protection under the country’s laws. 

The statement was jointly issued by the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China.

Cryptocurrencies have been very popular in China. It has been considered as one of the biggest hubs of Bitcoin mining. Such bans on financial institutions may negatively impact the Chinese crypto markets. 

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George Kim

George Kim

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