While cryptocurrency adoption seems to be entering a mainstream phase, the Chinese government has just dropped a bombshell that will adversely affect crypto entities in the country.
According to a Tuesday report, the country’s authorities have issued a declaration prohibiting all financial service providers in the country from accessing cryptocurrency-related transactions.
In effect, financial institutions and payment companies will no longer provide cryptocurrency services to their clients, including registration, trading, clearing, and settlement.
The statement was jointly signed by three major Chinese industry bodies — the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
The statement reads,
“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”
Crypto exchanges across the country can no longer offer their services to their clients as they are warned not to provide any savings, trust, or pledging services for cryptocurrency.
Additionally, crypto businesses cannot issue any crypto-related financial products, including organizing initial coin offerings (ICOs).
Cryptocurrencies “Are Not Supported By Real Value”
Although the ban does not restrict individuals from holding cryptocurrencies, the Chinese government has gone ahead to provide its citizens with strict warnings regarding the risks associated with crypto trading.
The country cautioned investors to guard against speculative crypto trading, adding that their prices can easily be manipulated and that they “are not supported by real value.”
After analyzing some of the major downsides to crypto trading, including price manipulation, false transactions, and high speculation, the country deemed it fit to increase the regulatory requirements surrounding crypto trading.
Just a few months ago, the Central Bank of Nigeria (CBN) banned banks from servicing crypto clients in the country, citing regulatory concerns and several other risks associated with crypto transactions.
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!