Updated Friday, September 24, 2021 – 13:07
The Bank of the People’s Republic of China has stressed that digital currencies do not have the same consideration as legal currencies, so they are not legal and should not be used as currency in the market
The President of the People’s Republic of China, Xi Jinping, BEBETO MATTHEWSAP
The Bank of the People’s Republic of China (PBOC), the country’s central bank, issued a statement on Friday in which it effectively prohibits any activity related to cryptocurrencies, including payments, ‘trading’ and advertising activities, alluding to the risks that it entails for national stability due to the risks of speculation.
The news has almost immediately affected the price of cryptocurrencies. The more than 9,300 cryptocurrencies that are listed on the ‘CoinGecko’ information website have registered a 5.3% drop compared to their price 24 hours ago, as reported by Europa Press.
Bitcoin, the largest cryptocurrency in the world by market capitalization, registered a 2.5% drop to an exchange rate of $ 42,522.2while Ether fell 6% to $ 2,901.13. On its side, cardano fell 1.8% to $ 2.17 and binance coin stood at $ 351.3, 6.1% less.
The PBOC has stressed that digital currencies do not have the same consideration as legal currencies, so they are not legal and should not be used as a currency in the market.
Likewise, the central bank has indicated that all business activities related to cryptocurrencies are illegal. This includes exchange rate services between official currencies and cryptocurrencies, exchange services between different cryptocurrencies, the clearing and liquidation of assets as central counterparty, the provision of cryptocurrency price information, the issuance of ‘tokens’ and derivatives transactions linked to cryptocurrencies.
It is not only illegal to provide all these services by Chinese companies. The PBOC has also pointed out that providing these services to Chinese residents over the Internet by ‘exchanges’ located abroad is also an illegal activity.
The battery of new prohibitions affects both companies and citizens. The regulator has explained that investments in cryptocurrencies involve legal risks, so all losses incurred will be its responsibility and may be investigated by the authorities.
In May, the China Financial Stability and Development Committee, a body subordinate to the State Council, agreed to take measures to benefit the real economy and prevent and control financial risks. As part of this, they deemed it necessary to “take action” against the bitcoin miner.
The PBOC has indicated this Friday that the new prohibitions are also mandatory for financial institutions and non-bank payment entities, which cannot provide services related to cryptocurrencies (account opening, transfer of funds or settlement) or accept that. type of digital currencies as collateral (guarantee) in any operation.
In addition, the bank has also prohibited “Internet companies” from providing advertising or marketing services for activities related to cryptocurrencies.
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