The People’s Bank of China (PBOC) has pressed major banks and payment platform Alipay to cease providing services linked to cryptocurrencies.
The PBOC issued the orders at a meeting where it had summoned the major lenders and payment platforms in the country. These included the Industrial and Commercial Bank of China and Agricultural Bank of China as well as Alipay.
The PBOC summarized the meeting in a statement, which it later rescinded. More specifically, it ordered all banks and payment institutions to strictly implement the ‘Notice on Preventing Bitcoin Risk’, and ‘Announcement on Preventing Token Issuance Financing Risk.’
They must fulfill their customer identification obligations, and not open accounts related to cryptocurrency trading, clearing, or settlement. Additionally, institutions must comprehensively investigate and identify virtual currency exchanges and over-the-counter dealers’ capital accounts, then cut off transaction funds payment links in a timely manner.
The PBOC said that virtual currency trading activities disrupt the normal economic, financial order. They also contribute to risks of criminal activities like illegal cross-border asset transfers and money laundering, and “seriously infringe on the safety of the people’s property.”
Bitcoin fell as much as 10% after the PBOC initially released its statement.
Following the meeting, the Agricultural Bank of China (AgBank), made its own public statement, in line with the PBOC. For instance, AgBank said it would conduct due diligence on clients, to find any activities involving cryptocurrency mining and transactions.
AgBank said it would immediately close the account of any client found to be involved in crypto trading, and cease its relationship with it. Then asking clients to report illegal activities, AgBank also cautioned them against crypto fraud.
Meanwhile, China has also blocked many cryptocurrency-related social media accounts. For example, searches for major cryptocurrency exchanges such as Binance and Huobi on baidu.com and Twitter-like platform Weibo have been barred.
China’s crypto crackdown
These events are just the latest in China’s efforts to reign in cryptocurrencies within the country. In May, the government banned banks or online payments channels from offering clients any services involving cryptocurrency. This sent the price of Bitcoin tumbling. Next, the government announced it would also be cracking down on crypto mining operations.
Most recently, Chinese officials targeted mining operations in hydropower-rich Sichuan province last week. Despite the crackdown on cryptocurrencies, Chinese authorities are enthusiastic about blockchain technology. In a recent release, they stated their intention to become the world’s most advanced blockchain technology by 2025.