Beijing: In an attempt to curb the growing digital trading market, China has gone ahead and banned financial institutions and payment companies from providing services related to cryptocurrency transactions.
Besides restricting the transactions, it also warned investors against speculative crypto trading. Also Read: Looking To Opt For Fixed Deposits With Free Insurance Cover? Here’s What You Should Know
What are the new directions?
As per the news agency Reuters, the latest ban directs institutions, including banks and online payments channels, not to offer clients any service involving cryptocurrency, such as registration, trading, clearing and settlement.
Of late the prices of crypto currency prices have skyrocketed leading to speculative trading of cryptocurrency and infringing on the safety of people's property and disrupting the normal economic and financial order," said three industry bodies in a joint statement on Tuesday.
Although it has banned crypto exchanges and initial coin offerings, but the latest ban extends to restricting individuals from holding cryptocurrencies.
It has stated clearly that institutions must not provide saving, trust or pledging services of cryptocurrency, nor issue financial product related to cryptocurrency/
It's not the first time Beijing has initiated clampdown against digital currency. In 2017, China shut down its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90 per cent of global bitcoin trading.
In June 2019, the People's Bank of China said it would block access to all domestic and foreign cryptocurrency exchanges and Initial Coin Offering websites. The statement also highlighted the risks of cryptocurrency trading, saying virtual currencies "are not supported by real value", their prices are easily manipulated, and trading contracts are not protected by Chinese law.