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China’s central bank says it will keep regulatory pressure on cryptocurrencies

The People’s Bank of China (PBOC) has said that it will continue to impose heavy regulatory pressure on the cryptocurrency market. The statement came months after the country decided to clamp down on crypto trading and mining. 

In a statement released on Saturday, the PBOC said that it will also supervise financial platforms to comply with regulations. It said that it will take steps to prevent major financial risks and lower the number of high-risk financial institutions in key provinces. It added that it will push for the creation of a financial stability law proposed by central bank deputy governor Liu Guiping in March. 

China’s crackdown on crypto trading and mining

China launched the most intense crackdown on crypto trading and mining since 2017 amid increasing popularity and surging prices of Bitcoin (BTC) and other cryptocurrencies. The flagship cryptocurrency hit an all-time high above $63,000 in April before it plummeted due to the market meltdown.

China is kicking out Bitcoin miners as authorities fear that the new asset class may be used in fraudulent activities such as money laundering. The move is also partly due to climate concerns as rising demand for coal in China and increasing electricity consumption are being attributed to crypto farms.  

China’s digital yuan

China is clamping down on the cryptocurrency market as it pushes for its digital yuan, the e-CNY.

“China’s government is doing everything they can to ensure that bitcoin and other cryptocurrencies disappear from the Chinese financial systems and economy,” said Fred Thiel, CEO of Marathon Digital Holdings and a member of the Bitcoin Mining Council, according to CNBC.

Trials for the digital currency began in May 2020 with four participating Chinese cities. Since then, the PBOC has expanded the program to include local and foreign retailers, majors banks, digital apps, and even the city of Hong Kong.

As early as next year, participants of the 2022 Beijing Winter Olympics may be able to pay for goods and services using the digital yuan as e-CNY trials expand to locations related to the sports event.

   

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