Priyeshu Garg · 8 hours ago · 4 min read
Almost 200 cryptocurrency exchanges and token issuing platforms have been shut down. According to the People’s Bank of China’s (PBoC) financial report, the country will continue to crack down on “unlicensed payment” businesses, which include online lending institutions and other financial companies operating on the internet.
Chinese crypto exchanges exit the market “without risk” after a government crackdown
While China’s “ambivalent” attitude towards cryptocurrencies has been the subject of many news reports, it’s safe to say that there’s nothing ambivalent about the country’s view of digital assets.
The country’s government has been tightening its grip over the financial industry and cryptocurrencies were the last ones hit. In the newly released Financial Stability Report, the People’s Bank of China (PBoC) stated that 173 “virtual currency trading and token issuing platforms have exited without risk.”
First shared on Twitter by Chinese blockchain outlet cnLedger, the news quickly blew up as many feared the drop in trading volume could further decimate the declining price of Bitcoin.
Cryptocurrency exchanges weren’t the only ones hit by the latest crackdown. According to PBoC’s report, the government has been promoting “special rectification of financial risks on the internet,” which decreased the number of online lending institutions from 5,000 to 1,490.
China pushes out all competition out of the country
With 173 crypto companies pushed out of the country, the Chinese government now has a clear path to further crackdown on the industry. According to Finews Asia, Shanghai offices of the People’s Bank of China (PBoC) said that they would be prosecuting “illegal activities regarding virtual currencies.”
Authorities in the Chinese city of Shenzhen also launched their own campaign to crack down on illegal activities on crypto exchanges, which led to 39 exchanges being investigated. Multiple other state departments followed suit with similar statements, with many of them specifically saying that Bitcoin and Ethereum will be the main focus of regulators.
The effort to eliminate the crypto industry from China is in line with the country’s plans to launch its own stablecoin. While there has been no official word from the government, rumors about a PBoC-issued stablecoin have been around for months.
The rumors intensified last month after China’s president Xi Jinping championed blockchain technology. In a speech, he called for the use of distributed ledger technology (DLT) in the digital economy, artificial intelligence, and big data. His calls for blockchain innovation were followed by swift action from PBoC, which is set to implement a new set of regulations that will apply to the country’s fintech industry.