China bans cryptocurrencies

China bans cryptocurrencies

China’s central bank has criminalised all cryptocurrency payments and services, including exchanging cryptocurrency for legal tender, providing information or pricing services, and trading in cryptocurrency derivatives. 

China’s digital yarn is set to launch next year and the government does not want competition for it, and does not want to allow any possible mechanisms for circumventing state capital controls.

A statement from the People’s Bank of China, the Cyberspace Administration of China and the Supreme People’s Court and other Chine authorities  said virtual currencies had “disrupted the economic and financial order” and bred money laundering, illegal fundraising and fraud.

In June,  five  Chinese banks state-run banks including the Industrial and Commercial Bank of China, Agricultural Bank of China and Alipay were ordered to stop  cryptocurrency transactions. 

Also in June, the Chinese government banned virtual currency mining. Supplying electricity to miners is illegal.