The Chinese government has announced that it will be cracking down on financial institutions that get involved in the cryptocurrency business, while also warning investors about the speculative nature of crypto trading.
The ban will prevent banks and other financial platforms from offering their clients any service related to cryptocurrency, including but not limited to their trading, clearing, and use.
The move is a continuation of China’s decision to shut down local crypto exchanges in 2017 in which would be one of the biggest blows to the crypto market.
Two years later in 2019, the People’s Bank of China also announced that it would be blocking access to all cryptocurrency exchanges and Initial Coin Offerings (ICO) platforms by taking advantage of the country’s advanced regulations on internet access.
These controls have been seen as a violation of human rights by critics of the Chinese Communist Party (CCP).
The statement was issued by the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, 3 of the country’s most important financial bodies.
Each of these bodies has been authorized by Chinese regulatory agencies to oversee all of their respective industry’s regulations, making their statement more than a simple recommendation to industry members.
The reasoning behind the ban was the high volatility of the crypto market, as well as the lack of “real support value” and “extremely easily” manipulable prices of digital assets.
China has been a huge influence on the crypto markets at times, and many of the largest crypto exchanges can trace their roots to Chinese development teams.
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