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China Looks to Ban & Censor Centralized Cryptocurrency Trading: Reports

Last Updated March 4, 2021 5:03 PM
Samburaj Das
Last Updated March 4, 2021 5:03 PM

China’s clampdown on cryptocurrencies continues as financial authorities reportedly plan to block domestic access to cryptocurrency trading platforms that enable centralized trading, within China and beyond.

A little over a year after China began its crackdown on the local cryptocurrency ecosystem, that scrutiny is now set to escalate further. Citing sources, Bloomberg  is reporting that China’s authorities are weighing up measures ‘to block domestic access to homegrown and offshore platforms that enable centralized trading.’.

Notably, smaller peer-to-peer transactions in bitcoin or other cryptocurrencies won’t see any scrutiny, according to the report.

Sourcing information from an internal memo from a government meeting, Reuters  cites People’s Bank of China (PBoC) Vice Governor Pan Gongsheng urging the government to enforce a complete ban on centralized trading. The memo from the meeting, held among internet regulators and other legislators last week, also has Pan suggesting local and national authorities target centralized cryptocurrency trading venues and the wider bitcoin services industry. Individuals and institutions who provide settlement and clearing services, guarantees and even centralized online wallet providers are also to see a ban, Pan reportedly added.

In details coinciding with Bloomberg’s report, Pan also called on China’s internet regulator to block access, censoring Chinese users from domestic and foreign cryptocurrency exchanges alongside mobile apps enabling centralized trading services. Platforms who provide cryptocurrency payment services ought to be sanctioned, Pan added.  Concerned about China’s capital flight, the central banker also called on authorities to investigate remittance and money transfer services that help citizens move funds offshore.

Further, Pan also doubled down on China’s recently reported clampdown on domestic cryptocurrency miners.

According to the memo, he told assembled regulators and policy-makers:

“Pseudo-financial innovations that have no relationship with the real economy should not be supported.”

As reported at the turn of the year, China’s central bank is looking to scale down domestic bitcoin mining leading “toward an orderly exit” altogether. Chinese bitcoin miners have already established or in the process of finding viable alternative locations in countries like Switzerland and Canada.

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