China orders banks to step up anti-crypto campaign

China’s central bank warned several of its largest state-owned banks and Jack Ma’s Alipay to “investigate and identify” bank accounts that would facilitate cryptocurrency trading and block all relevant transactions in the latest move. Beijing against Bitcoin.

The central bank said Monday it had called on the Agricultural Bank of China, the Construction Bank of China and ICBC, as well as other payment platforms such as Alipay, to discuss the issue of “providing services for speculation. of cryptocurrency transactions “.

The regulator asked financial groups to identify and block all transfers to accounts that had exchanges of cryptocurrencies and other marine intermediaries, as well as invest in technology to identify any transactions related to “cryptocurrency speculation.”

The order is part of a recent crackdown by the Chinese government against cryptocurrencies that began in May, as Beijing intends to end trade and close the world’s largest cryptocurrency operations, which are located within its borders. Instead, the central bank wants citizens to use its own digital currency, which it has begun testing on large-scale pilots.

Although Chinese authorities have taken the first steps to ban banks from handling Bitcoin transactions since 2013 and have since launched several crackdowns, they have not been able to completely eliminate cryptocurrency trading. Industry professionals said that one way the Chinese continue to get Bitcoin is through peer-to-peer traders.

Leo Weese, co-founder of the Hong Kong Bitcoin Association, said that to enforce the directive, authorities and banks could start tracking and cutting bank accounts that peer-to-peer merchants use to accept payment.

“Bitcoin trading in China will continue, but it will become less liquid and spreads will increase,” Weese said. “People will just negotiate with their friends and trusted friends.”

The People’s Bank of China said the cryptocurrency trade disrupts the financial system, runs the risk of illegal asset transfers and money laundering, and “seriously violates the security of people’s financial assets.”

As part of its strict capital control regime, China has drastically limited the ability of citizens to transfer money abroad and has cautiously viewed Bitcoin since the cryptocurrency rose in popularity nearly a decade ago.

As of last month, China has intensified efforts to disconnect from power-hungry Bitcoin mining in the country, where nearly 75 percent of the world’s mining activities took place, according to pre-repression estimates.

Sichuan, a province rich in hydroelectric power in southwest China, was the last province to ask them to stop operating 26 of their largest local mines last week. It followed bans from local governments at major cryptocurrency mining locations in Xinjiang, Yunnan and Qinghai.

The northern region of Inner Mongolia even set up a hotline so that residents can whistle to neighbors who suspect they are cryptocurrency miners.