Science & Technology

China bans financial, payments firms from cryptocurrency business

Beijing: China has banned financial institutions and payments companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.

Under the China crypto ban, such institutions, including banks and online payments channels, must not offer clients any service involving cryptocurrency, such as registration, trading, clearing and settlement, three industry bodies said in a joint statement on Tuesday. “Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” according to the statement.

China has banned cryptocurrency exchanges and initial coin offerings (ICOs) but has not barred individuals from holding cryptocurrencies.

The institutions must not provide saving, trust or pledging services of cryptocurrency, nor issue financial product related to cryptocurrency, the statement also stated.

The statement highlighted the risks of cryptocurrency trading, saying vitural currencies “are not supported by real value”, their prices are easily manipulated, and trading contracts are not protected by Chinese law.

The three industry bodies are: the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China.

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