Crypto Winter in China as Government Bans Bitcoin Mining and Trading

On June 21, the People’s Bank of China (PBOC) issued a document stating that it had appointments with major state-owned banks and mobile payment provider Alipay for providing cryptocurrency transaction services. Banks and payment institutions are required to strictly implement the Notice on Preventing Bitcoin Risks” and Announcement on Preventing Initial Coin Offering (ICO) Risks, and must not provide account opening and registration for related activities, including trading, clearing, and settlement. The PBOC claimed that cryptocurrency trading activities disrupt the markets, adding to risks of illegal cross-border transfer of assets and money laundering.

China had cracked down on cryptocurrency in 2017, when the government banned all domestic exchanges, shutting down 90 percent of the speculative market in global bitcoin transactions. In 2019, China blocked access to cryptocurrency exchanges and ICO websites and prohibited related translations via foreign exchange limitations. The current Chinese government ban restricts transactions, ICOs, financial institution services, and mining, yet does not extend to individuals’ ownership of cryptocurrencies.

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