The director of the financial regulator of Beijing said the city would not license any cryptocurrency exchange, and that only China’s central bank could issue digital currency.
Huo Xuewen, director of the Beijing Financial Bureau, said the regulator had “zero tolerance” for cryptocurrency, and said that it could not be used as legal currency in China, according to 8BTC report.
The director noted that some cryptocurrency exchanges are already adopting alternative business structures to circumvent restrictions. Reiterating the illegality of buying, selling, trading and issuing cryptocurrency, he said the regulator would continue to treat these matters seriously.
China has adopted a hardline approach on regulating cryptocurrencies, effectively banning domestic users and investors from engaging with crypto assets. Conversely, the country’s central bank has discussed issuing a central bank-backed digital currency, which would be pegged to the Chinese yuan, effectively moving fiat money onto the blockchain.
Similarly, government agencies across China have been keen to embrace blockchain technology for a range of functions, handling a variety of administrative functions more efficiently than with current systems.
In his statement, Huo said that cryptocurrency and speculation has “no real value,” other than providing a basis on which investors can be “cheated” out of their money.
In addition to speculation, cryptocurrency has no real value. There is no need for a trading platform that has no real value but can only cause investors to be cheated and social instability.
Authorities in Beijing recently made arrests in connection with a crypto exchange called BISS, which was registered overseas but which had been trading in China. On the arrests, the regulator said cross-border crypto transactions were not allowed in China.
“China does not allow cross-border cryptocurrency transactions. No institution can sell overseas cryptocurrency to Chinese, and no institution can provide the exchange of cryptocurrency to CNY. For this, we will closely monitor and crackdown on it,” Huo said.
Despite the central bank’s embrace of cryptocurrency, there are no plans for China to change course on its cryptocurrency ban any time soon. According to Huo, this position is unlikely to change, regardless of whether the People’s Bank of China ultimately issues a digital currency of its own.