Chinese associations call for crypto crackdown citing safety concerns

Three Chinese associations have called for a complete ban on financial institutions and payment firms providing cryptocurrency services to customers.

According to Regulation Asia, The National Internet Finance Association of China (NIFA), the China Banking Association (CBA) and the China Payment and Clearing Association (PCAC) have issued a joint notice claiming cryptocurrency speculation has ‘seriously infringed on the safety of the people’s property and disrupted the normal economic and financial order’.

The three associations have barred their members from offering crypto-related services to customers and has called on the Chinese government to ban direct and indirect cryptocurrency services, including the acceptance of crypto as payment.

The NIFA, CBA and PCAC claim they are looking to implement the requirements of notices previously issued by the People’s Bank of China as well as other government agencies, who had restricted financial institutions and payments firms from conducting Bitcoin-related or initial coin offering business.

The notice said, “Cryptocurrencies are a specific type of virtual commodity that are not issued by a monetary authority, do not possess the qualities of money such as statutory status, are not real money, and should not be employed as money for circulation in the market.”

Per the notice, financial and payment institutions, as well as other members of the three associations, should not use cryptocurrencies to underwrite insurance businesses, price products and services or provide services such as trading, registration, settlement, clearing, custodial, exchange, trust or pledging to customers.

Banks and payment companies have also been asked to bolster information sharing and monitoring as well as restrict and suspend transactions thought of being related to cryptocurrency, with those that violate the law being reported to authorities.

The notice also warns investors to be wary of speculating in cryptocurrencies and remarks investors should be ‘wary of scams’ related to cryptocurrencies.

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