The ‘China crypto FUD’ is back again, but it’s misleading 🚨 This article is 4 years old...
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The ‘China crypto FUD’ is back again, but it’s misleading
Chinese authorities reiterated their crypto warnings on Tuesday, sending prices downwards as the market reacted.
2 min read
Updated: May. 19, 2021 at 5:31 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Three industry bodies under the Central bank of China released a document today calling for a ban on financial institutions and online payments channels providing any services involving cryptocurrency, including but not limited to registration, trading, clearing, and settlement.
Additionally, the institutions would not be allowed to offer to save, trust or pledging services, nor issue any financial products related to cryptocurrency.
No crypto
In their joint statement, the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China are also warning investors against speculative crypto trading, highlighting that cryptocurrencies “are not supported by real value”.
Despite blocking crypto exchanges and initial coin offerings, China has not prohibited individuals from holding cryptocurrencies.
“Chinese admit that they are researching and learning, but they will adhere to the current policy before reaching a conclusion, that is, to recognize the legal status of Bitcoin, allow individuals to participate, but not allow Chinese companies and institutions to be involved”, tweeted Chinese journalist Colin Wu.
Three associations under the Central Bank of China issued a document requiring institutions not to conduct virtual currency business, calling on the public not to participate in virtual currency, and emphasizing that virtual currency transactions are not protected by law,” he added.
Breaking: Three associations under the Central Bank of China issued a document requiring institutions not to conduct virtualcurrency business, calling on the public not to participate in virtualcurrency, and emphasizing that virtualcurrency transactions are not protected by law.
— Wu Blockchain (@WuBlockchain) May 18, 2021
Document not government issued?
The statement also emphasizes that individual investors should “correctly understand the essential attributes of virtual currency and related business activities,” pointing out that their prices are easily manipulated and trading contracts are not protected by Chinese law.
The altcoin market in China witnessed a recent surge in interest, drawing the attention of the China Internet Finance Association. However, the fact that the document was issued by the association and not the Chinese authorities, shows that it has not yet reached a higher level of government scrutiny, according to Wu Blockchain.
The newest restrictions fall in line with the country’s plans to launch its own digital currency, the Digital Currency, Electronic Payment (DCEP).
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.