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Scam: China’s Central Bank Warns of Faux ‘Authorized’ Digital Currencies

Last Updated March 4, 2021 4:57 PM
Samburaj Das
Last Updated March 4, 2021 4:57 PM

China’s central bank has issued a warning on digital currencies purporting to be authorized by the authority to fraudulently lure investors.

Issued on June 15 by the Currency Gold and Silver Bureau of the People’s Bank of China (PBoC), the public notice alleges that some companies are misrepresenting themselves as operators of digital currencies and investments authorized by the central bank. The PBoC moved to clarify that it had not issued any fiat digital currency, nor authorized institutions or enterprises to promote or issue digital currencies.

The central bank also explicitly stated that digital currencies currently on the market aren’t related to China’s fiat currency. In its position as the financial watchdog, the PBoC also claimed that some digital currency offerings promoted by operators and enterprises “may involve pyramid schemes”.

The authority summed up the alert by underlining the Renminbi (RMB) as China’s sole legal currency.

Roughly translated, the statement concluded:

The general public should see the correct concept of money, ensure care of of the Renminbi and maintain the normal circulation of RMB together.

The notice comes at a time when the PBoC is widely seen as the major central bank setting the precedent toward developing and issuing a national digital currency. As CCN.com reported in early 2016, the PBOC publicly revealed its intention to explore its own digital currency after researching the idea for over two years. PBOC governor Zhou Xiaochuan stated it “differs from Bitcoin” from the very beginning of its concept stage.

In December 2016, the PBoC competed a trial run of its digital currency over a blockchain that saw several major commercial banks as participants.

This year, the central bank has stepped up its scrutiny into the Chinese bitcoin ecosystem, leading to a clampdown in bitcoin trading activity that saw Chinese exchanges resume bitcoin withdrawals after a months-long freeze in June.

Featured image from Shutterstock.