People’s Bank of China steps up Bitcoin ban with financial institutions meeting

The People’s Bank of China summoned financial institutions to stress that no Chinese citizen can conduct bitcoin transactions.

The People’s Bank of China (PBOC) has called major Chinese financial institutions to a meeting to strengthen a scalable nationwide ban on bitcoin services, Bloomberg reported. The institutions were summoned to help the central bank prevent Chinese citizens from trading bitcoin through over-the-counter exchanges and platforms.

“Banks and payment institutions must strictly enforce … regulatory requirements, seriously fulfill their customer identification obligations and must not provide account opening, registration and registration for [virtual currency-related] activities, ”reads a translated version of the PBOC statement. “Institutions should thoroughly investigate and identify virtual currency exchanges and OTC brokerage capital accounts, and cut the payment link for timely transaction funds … and effectively improve monitoring capabilities and identification. “

China has taken similar steps to try to ban bitcoin trading in the country in the recent past. However, with this new resolution, the government is now attempting to completely prevent individuals from accessing cryptocurrency. In addition, local banks have been ordered to identify and stop payments from accounts to any institution that can provide bitcoin trading services. This indicates that the latest regulation takes China’s bitcoin ban to a significant new level, threatening to shut off access to the banking system to those who engage in bitcoin trading activities.

The organizations convened to the recent PBOC meeting pledged to increase and improve the inspection capabilities of cryptocurrency activities and to close associated accounts. Organizations that attended the meeting include major payment processor Alipay, Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, and Postal Savings Bank.

Bitcoin mining shutdowns in China

In May, the Chinese State Council called for a strict crackdown on bitcoin mining and trading activities. Since then, several provinces across the country have taken active steps to enforce this crackdown, as have some internet service companies. Baidu like Google and Weibo like Twitter, for example, have censored keywords related to bitcoin exchanges. And bitcoin miners in Zhundong Development Park in Xinjiang province received a notice in early June asking them to immediately cease operations.

Other Chinese provinces have also taken similar measures. The Yunnan Energy Bureau, for example, has asked its subordinate departments to inspect bitcoin mining companies in the region for illegal activity. And more recently, officials at Sichuan Province’s largest bitcoin mining hub have reportedly ordered regional bitcoin mining operations to shut down for inspection.

It is not possible to ban Bitcoin

Representatives of Chinese bitcoin mining rig maker Canaan have opposed the country’s crackdown on the industry, saying bitcoin mining decreases wasted energy, helps create jobs and feeds the economy local. But that apparently had no effect.

As a result, China recently demonstrated how the country could move towards an outright ban on Bitcoin with its actions at the national and provincial level.

But perhaps he realizes that this is ultimately a fool’s game, since Bitcoin cannot be banned, and instead he is simply seeking to cut off the paths that its citizens can take to access. bitcoin services – making it harder for the Chinese to buy and sell bitcoin, which will likely affect the overall price in the short term. But that can turn out to be the wrong position to take. Instead, game theory is likely to prevail, and the host countries will be the ones to reap the economic benefits of adopting a sovereign independent country monetary good that makes any other currency obsolete.

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