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Explainer: What Beijing s new crackdown means for crypto in China
05/19/2021 7:36
SHANGHAI (Reuters) - Chinese regulators have tightened restrictions that ban financial institutions and payment companies from providing services related to cryptocurrency, marking a fresh crackdown on digital coins.
Many of the new rules expand on previous restrictions aimed at cryptocurrencies and close loopholes that had allowed some finance and payment firms to continue in the trade.
WHAT ARE THE NEW MEASURES?
Three financial industry associations on Tuesday directed their members, which include banks and online payment firms, not to offer clients any services involving cryptocurrency, such as currency exchanges, registration, trading, clearing and settlement.
The organizations noted that cryptocurrency has “no real value support”.
Three Chinese associations have released a report on the ban on financial institutions and payment companies across the country regarding offering crypto services. The self-regulatory bodies are the China Banking Association, the National Internet Finance Association of China, and the Clearing Association of China. These organizations have reinforced the crypto ban that prevents financial organizations in China from all crypto-related services.
According to the three industry bodies, the high volatility in cryptocurrencies affects the “normal economic and financial order” in China. Firstly, the organizations noted that crypto is not backed by any monetary authority. They specified that virtual currency is not real money and should not, and cannot, be used as fiat currency in the market.
China cracks down on digital currency, orders financial institutions to end crypto services thecable.ng - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from thecable.ng Daily Mail and Mail on Sunday newspapers.