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Business & Finance

China's central bank urges tougher crackdown on cryptocurrencies

  • The PBOC urged institutions to launch thorough checks on clients' accounts to identify those involved in cryptocurrency transactions, and promptly cut their payment channels.
Published June 21, 2021

SHANGHAI: China's central bank said on Monday it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading.

The People's Bank of China's meeting with institutions including Agricultural Bank of China (AgBank) and Alipay came after China's State Council, or cabinet, last month vowed to crack down on bitcoin trading and mining.

The PBOC urged institutions to launch thorough checks on clients' accounts to identify those involved in cryptocurrency transactions, and promptly cut their payment channels.

"Speculative trading in virtual currencies roils economic and financial order, spawns the risks of criminal activities such as illegal asset transfers and money laundering, and endangers people's wealth," the PBOC said in a statement.

Other participants in the PBOC's meeting included state-owned China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and Postal Savings Bank of China.

Bitcoin's bull run globally had revived speculative trading in China, where people buy cryptocurrencies using yuan via bank accounts or payment platforms. Last month, three industry associations issued a ban on crypto-related financial services, but the bodies are much less powerful than the PBOC.

The PBOC asked banks and payment companies to invest more in technologies used to better identify crypto-related transactions, and know their clients better.

After the central bank's notice, AgBank, ICBC, CCB and Alipay all released separate statements saying they would conduct due diligence on clients to root out illegal crypto-related activities and shut down suspicious accounts.

As China ramped up its campaign against cryptocurrencies in recent weeks, bans on cryptomining have been issued in major bitcoin mining hubs, including Sichuan, Xinjiang, and Inner Mongolia.

China has also blocked a slew of cryptocurrency-related social media accounts, and barred the search for major cryptocurrency exchanges such as Binance and Huobi on baidu.com and Twitter-like platform Weibo.

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