China prohibits any activity related to cryptodivisas, including payments, 'trading' and advertising

The Bank of the People's Republic of China (PBOC), the Central Bank of the country, has issued this Friday a statement in which it effectively prohibits any ac

China prohibits any activity related to cryptodivisas, including payments, 'trading' and advertising

The Bank of the People's Republic of China (PBOC), the Central Bank of the country, has issued this Friday a statement in which it effectively prohibits any activity related to cryptodivisas, including payments, 'trading' and advertising activities, alluding to the risks involved in national stability for the risks of speculation.

The news has almost immediately affected the contribution of cryptomoneds. The more than 9,300 cryptomoneds that are listed on the 'Coingecko' information web have registered a 5.3% drop with respect to its price 24 hours ago, as reported by Europe Press.

The Bitcoin, the largest cryptomon of the world by market capitalization, recorded a fall of 2.5%, until at a rate of change of 42,522.2 dollars, while Ether fell by 6%, up to $ 2,901.13. On the other hand, Cardano fell by 1.8%, up to $ 2.17 and Binance Coin was at 351.3 dollars, 6.1% less.

The PBOC has underlined that digital currencies do not have the same consideration as legal currencies, so they are not legal and should not be used as a currency in the market

Likewise, the Central Bank has indicated that all business activities related to cryptodivisas are illegal. This includes services of exchange rate between official currencies and cryptodivisas, exchange services ('Exchange') between different cryptodivisas, the compensation and settlement settlement as a central counterpart, the provision of price information of cryptodivisas, the emission of 'tokens' and derivative transactions linked to cryptodivisas.

Not only is it illegal to provide all these services on the part of Chinese companies. The PBOC has also indicated that providing these services to Chinese residents through the Internet by 'Exchanges' located abroad is also an illegal activity.

The battery of new prohibitions affects both companies and citizens. The regulator has explained that investments in cryptodivisas involve legal risks, so all losted losses will be their responsibility and may be investigated by the authorities.

In May, China's Financial Stability and Development Committee, an agency subordinate to the State Council, agreed to take measures to benefit the real economy and prevent and control financial risks. As part of this, they considered it necessary to "take action" against Bitcoin's mining.

PBOC has pointed out this Friday that new prohibitions are also obliged compliance for financial institutions and for non-banking payment entities, which can not provide services related to cryptodivisas (account opening, funds transfer or settlement) or accept that Type of digital coins as collateral (guarantee) in any operation.

Likewise, the Bank has also banned "Internet companies" to provide advertising or marketing services for Cryptodivisas-related activities.

Updated Date: 24 September 2021, 08:27

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