The People’s Bank of China just released a note that effectively outlawed cryptocurrency in China. This note was issued to “the people’s governments of all provinces, autonomous regions, and municipalities under the Central Government, and Xinjiang Production and Construction Corps. That’s everyone in China – every Chinese citizen, anyway. They’re targeting what they’re called “virtual currency trading hype activities” of all sorts.
Per the discharge today, the People’s Bank of China cares that virtual currency trading hype activities are “disrupting the economic and financial order.” They’ve also claimed that this virtual currency trading is “breeding illegal and criminal activities” such as:
• Illegal fund-raising
• Pyramid schemes
• Endangering the security of people’s property
China’s release points specifically to “virtual currencies like Bitcoin, Ethereum and TEDA.”
Part of the decision to remove the threat from China includes the banning of certain phrases within the names of registered market entities. The registered names and business scope of enterprises and individual industrial and commercial households “must not contain words or content” such as:
• virtual currency
• virtual assets
• encrypted currencies
• encrypted assets
The release today from the Chinese government included several new rules and clarifications for entities inside China. “Virtual currency-related business activities are illegal financial activities,” clarifies that nobody or business within China can conduct business with virtual currency of any sort.
The new rule set also included “the provision of services by overseas virtual currency exchanges to Chinese residents through the Internet” as an illegal financial activity. They also made clear that any legal person, unincorporated organization, or natural one that invests in virtual currency will be subject to the loss of said currency, as “the relevant civil legal acts are invalid.”
It is not clear how Chinese officials plan on enforcing the “loss” of said data. They did suggest that the right authorities will “promptly shut down” all “internet applications like websites, mobile applications, and little programs that perform virtual currency-related business activities.” That bit is aimed toward crypto mining, transfer, and payments.
This is the foremost, massive and protest the Chinese government has taken against cryptocurrency. It’ll be interesting to ascertain how the market reacts, given past jumps and falls of crypto value when major government actions like these have occurred.