China’s top regulators stepped up their crackdown on cryptocurrencies on Friday, imposing a blanket ban on all crypto transactions and mining and putting pressure on bitcoin and other major coins, as well as crypto and blockchain-related companies.
Ten agencies, including the central bank and finance, securities, and foreign exchange authorities, have pledged to work together to combat “illegal” cryptocurrency activities. This is the first time Beijing-based regulators have banded together to expressly prohibit all cryptocurrency-related activity.
Financial institutions and payment businesses in China were barred from offering services connected to cryptocurrency transactions in May, with similar prohibitions in 2013 and 2017.
Though banks and payment companies say that they support the endeavor, the repeated prohibitions illustrate the difficulty of closing loopholes and identifying bitcoin-related transactions.
Beijing’s determination to smother the Chinese crypto market is underscored by Friday’s statement, which is the most thorough and expansive yet from the country’s primary regulators.
“In the history of crypto market regulation in China, this is the most direct, most comprehensive regulatory framework involving the largest number of ministries,” said Winston Ma, NYU Law School adjunct professor.
Governments from Asia to the United States are concerned that privately-run volatile digital currencies could undermine their control of the financial and monetary systems, create systemic risk, promote financial crime, and harm investors.