China forbids payment and financial institutions from crypto business

China has forbidden payment and financial firms from offering services related to crypto transactions. Further, the country has warned investors against speculative crypto trading.

In a joint statement, three industry bodies informed on Tuesday that under the ban, institutions like online payment channels and banks must not offer clients any service involving digital currency. This involves trading, registration, clearing and settlement.

The three industry bodies are the China Banking Association, the National Internet Finance Association of China and the Payment and Clearing Association of China.

The statement mentioned that lately virtual currency prices have hiked and plunged and speculative trading of crypto has bounced. This is seriously violating the safety of people’s property and disrupting the normal financial and economic order.

China has forbidden initial coin offerings and crypto exchanges. But, it hasn’t prohibited people from owning cryptocurrencies.

The statement also mentioned that the institutions must not provide trust, saving or pledging services of crypto. Also, they must not issue financial products related to crypto.

Further, the statement highlighted the risks of digital currency trading mentioning cryptocurrencies are not backed by real value, contracts are not protected by Chinese law and their prices are easily manipulated.

 

 

Author: Diksha Khiatani

A writer by day and a reader at night. Emerging from an Engineering background, Diksha is a travel freak and anxious to explore different cultures and religions. Inclined towards the off-beat places, she wishes to uncover the secrets on her Scooty (if possible). She always grabs some time to take a quick nap, listen to music, skating and eat a brownie.

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