China and cryptocurrencies continue to be a bad fit. After the government shut down Bitcoin mining centers in the country, negative voices are also coming out of the Chinese central bank. Despite its rising value, Bitcoin has no value whatsoever, they say.
Yin Youping, deputy director of the People’s Bank of China’s (PBoC) Consumer Financial Rights Protection Bureau is now criticizing cryptocurrencies. He said the digital assets are purely speculative assets – nothing more.
The official also advised the public to stay away from the crypto market to avoid financial losses. Youping stated:
“We remind people again that virtual currencies like Bitcoin are not legal offerings. They have no actual value.”
Youping said that in anticipation of a possible resurgence in virtual currency trading, the central bank will work with relevant departments to monitor foreign exchanges and domestic traders. For example, Youping said, central bank is actively cooperating with the leading departments of the China Banking and Insurance Regulatory Commission.
It also plans to take tougher action against crypto companies in the future. Crypto exchanges like Binance are already only accessible via VPN.
China vs. crypto
Earlier this year, China launched its toughest crackdown on digital currency trading and mining since 2017.
Authorities expressed fears that the new asset class could be used for illegal activities such as money laundering. Moreover, due to the rising energy demand of crypto farms, cryptocurrencies could exacerbate climate issues in the country.
The PBOC reiterated China’s stance on the digital assets sector last month. It said it would continue to exert strong regulatory pressure on the crypto market.
In China, even foreign companies have a hard time getting approved regardless of blockchain technology – be it Google, Facebook or Amazon. This makes the government all the more critical of the decentralized nature of cryptocurrencies. The concern about a loss of control seems too great.
Government working on its own digital currency
China’s stance on cryptocurrencies in circulation is clear. Nevertheless, the country of around 1.4 billion people is already working on its own digital currency issued by the central bank.
Therefore, it remains exciting to see how the crypto story unfolds in China. Dith its large population, China is an interesting market in the crypto space in the long run even without the mining operations.
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