China Tightens Crypto Trade

China Tightens Crypto Trade
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China’s foreign exchange regulator has introduced new rules requiring Chinese banks to monitor risky trades related to crypto assets. These rules are aimed at curbing illegal activities such as cross-border crypto trading.

Details of These Restrictions


As reported on Dec. 31, the new rules will make it harder for Chinese residents to purchase digital assets. This is part of China’s ongoing effort to limit the use of cryptocurrencies.
Now, banks in China are required to track and report suspicious foreign exchange activities, including cross-border gambling, underground banking, and illegal financial activities involving cryptocurrencies.


The new regulations also mandate banks to monitor individuals and organizations based on their identity, the sources of their funds, and how often they trade. This tightens control over cross-border financial activities involving crypto.

A lawyer, Liu Zhengyao, explained that the new rules make it easier for authorities to penalize those trading cryptocurrencies and that China’s strict regulatory stance against crypto trading is expected to continue.

He also explained that activities like using the Chinese yuan to buy crypto and converting it into foreign currencies are considered cross-border financial activities. The new rules make it harder for residents to bypass these restrictions.


In spite of these regulations, Former Binance CEO Changpeng Zhao speculated that China might adopt Bitcoin reserves in the future. He stated that the government is capable of quickly implementing such policies if it chooses to do so.

What You Should Know

China banned cryptocurrency transactions in 2019, citing concerns about excessive energy use from crypto mining and environmental harm. Banks and financial institutions were also prohibited from dealing with digital assets.

However, despite its ban on cryptocurrencies, China holds around $18 billion worth of Bitcoin (194,000 BTC), ranking second globally in terms of Bitcoin holdings. These holdings were acquired through government asset seizures tied to illegal activities.


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