China: the central bank still against cryptocurrency trading
Crypto

China: the central bank still against cryptocurrency trading

By Marco Cavicchioli - 25 Nov 2019

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The Chinese central bank (PBoC) has instructed companies offering investments in cryptocurrencies to address any misconduct

In fact, despite the prohibitions imposed in the country regarding exchanges between fiat currency and cryptocurrencies, it seems that citizens continue to speculate on crypto. 

The aim of the PBoC is to warn investors to pay close attention to this kind of speculation and in particular to be wary of investing in cryptocurrencies.

The Shanghai office of PBoC has reported the existence of “suspicious companies” that conduct advertising campaigns in the country offering offshore crypto exchange services, which have been ordered to take immediate corrective action or to cease their offers

In addition, it has been revealed that the Chinese central bank will increase controls and regulation of the sector, as explicitly stated in a recent update published on the official website. 

In particular, the document refers to ICOs, IEOs and STOs, and unspecified “financial institutions” selling tokens illegally, although the document also makes explicit reference to investments in bitcoin, ethereum and other virtual currencies. 

These are referred to as “unauthorised illegal public financing”, while illegal fundraising is referred to as “financial fraud” and “pyramid schemes” that compromise the economic and financial order.

With regard to future actions, the Shanghai Office of PBoC states that it has initiated special projects on virtual assets, with a view to rehabilitating the sector to solve the problem of cryptocurrency trading platforms registered abroad, but offering services to Chinese citizens. 

The fact that, despite the ban, the Chinese continue to trade with cryptocurrencies is therefore known to PBoC, although in particular, it seems that the central bank is hurling itself mainly against those platforms that advertise their services in the country. 

That is, the PBoC has instructed these companies to take corrective action or to abandon their activities in the country, although no countermeasures have been revealed.

China and cryptocurrencies: a contradiction? 

At the same time, the People’s Bank of China wants to launch its own digital currency (DCEP) and, given the strong interest in blockchain in the country, nothing can deny that it could be based on this technology.

The President of Billion Team Enterprise, Marinella Andaloro, recently explained: 

“We have been dealing with the Chinese (but even more with Hong Kong residents) since 2013, first of all the crypto world and then the blockchain with a focus on financial services. The Chinese who are most enterprising and eager to enter the sector,= are trying to circumvent the obstacle of the ban by turning to third-party companies with locations in crypto friendly jurisdictions, but this phenomenon has become more frequent already in 2016”.

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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