Policymakers in China have banned financial institutions in the country such as digital payment platforms and traditional banks from providing cryptocurrency-related services.
This was announced in a joint statement by the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
Regulators also advised investors from participating in speculative cyrpto trading, according to Economic Times.
Services such as settlement, trading, registration, and others linked to cryptocurrencies were prohibited from being offered by financial institutions.
A statement from the government noted that the volatility of cryptocurrency was “seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”
Supporting its reason for the ban of cryptocurrency trading, regulators in China argued that digital currencies “are not supported by real value”.
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Recently, China revealed its own digital currency that will be controlled by its apex bank.
Transactions performed with the digital yuan will be monitored by the Chinese Government, as it would enable a close examination of the movement of money.
Leading the creation of the digital yuan, Mu Changchun, said of the importance of the currency to the country, “In order to protect our currency sovereignty and legal currency status, we have to plan ahead.”
Chinese regulators also disclosed that the digital yuan would be used alongside extant coins and paper money for some time, as reported by The Wall Street Journal.
Over 100,000 Chinese residents participated in a test exercise, with the government dolling out bits of the currency to participants.
Experts press on the issue of the Chinese Government’s knack for close surveillance of its people, stating that the creation of the digital currency and the following of transactions would serve as another avenue for the tracking of the citizenry.
Changchun noted that the People’s Bank of China would limit the tracking of users.
