The country has also warned investors against trading in digital currency
China has banned all remittance companies as well as financial institutions from engaging in cryptocurrency-related transactions, according to the official statement.
The three industry bodies that mandated the ban include the China Banking Association, the National Internet Finance Association of China and the Payment and Clearing Association of China.
This comes as China attempts to stop a burgeoning cryptocurrency market. The ban deters online payment avenues and banks from offering any cryptocurrency services. This includes trading, settlement, registration and even clearing.
This comes as the speculative trading of digital currencies infringes the safety of people’s investments not forgetting the disruption of normal economic activities.
Even with the ban, people who wish to hold digital currencies have not been banned from doing so.
The announcement caused a slump in Bitcoin and other digital currencies with a major fall below $40,000.
Nevertheless, this is not the first time that China has banned the use of cryptocurrency. In 2017, the country closed down the local digital currency exchanges. This move affected a market that accounted for 90% of Bitcoin trading globally.
In 2019, an announcement was made by the People’s Bank of China stating an imminent block on foreign as well as domestic foreign exchanges in the country.
The recent ban highlights the non-support of virtual currency by real value as one of the risks in trading in cryptocurrencies. Also, the trading contracts are not regulated by law, not forgetting the ease of manipulation of the prices.
We’ve reported that Turkey banned cryptocurrency.