China’s Crypto-Ban Reminder May Be Common but Must Not Be Taken Lightly
Ever since China put a ban on the trades and movements of cryptocurrencies in the country, it tends to publish a reminder every now then. The most recent cryptocurrency ban notice/reminder was rolled out by the Chinese Government on Tuesday, May 18, 2021.
Although many would take the notice as all other notices published by the Chinese Government, this reminder is a bit different. According to many analysts and cryptocurrency market observers, the recent notice from the Chinese Government is specific.
The observers have stated that the recent intimation is pointed towards payment companies and commercial banks. The reason for target these entities is because of their conduct towards the cryptocurrency industry in the past years.
Ever since the Chinese Government imposed crypto-ban, it has been closely monitoring every financial institution. The government is very vigilant in terms of adherence and compliance with its orders, and instructions.
According to sources, the Chinese Government has been monitoring the activities of these financial companies and commercial banks. The government has noticed that these entities are very friendly towards the cryptocurrency sector. These entities are showing much interest in businesses that are operating in cryptocurrencies.
As per reports, three major regulatory authorities have collectively issued/published the recent notice pertaining to cryptocurrencies. The names of these regulators are The Payment and Clearing Association of China, China Banking Association, and the National Internet Finance Association of China.
The particular regulators have published the notice where they have reminded the financial institutions that they must not get involved in any cryptocurrency-related activities. Financial institutions must avoid performing any cryptocurrency-related investment funds or transactions.
Although it was yet another reminder from the regulators, still, it managed to cause a storm in the Chinese cryptocurrency market. Right after the publication of the notice, a huge sell-off for cryptocurrencies was observed on Wednesday, May 19, 2021. This resulted in the cryptocurrency industry losing almost a trillion dollars in the process.
However, the cryptocurrency market managed to make a comeback the following day (May 20, 2021), and the cryptocurrency market is recovering since then.
This shows that the Chinese Government and its regulators are well-aware of the activities taking place in the country in terms of cryptocurrencies. The government directly addressing the payment processors and Chinese local banks mean it is well aware of their activities in the crypto-space.
Even Global Blockchain Compliance Union’s chief consultant, Tao Luo has talked about the significance and message behind China’s recent crypto-ban reminder.
He stated that to the rest, it may appear as an indirect intimation, but it is a clear one for the payment processors and commercial banks. It is no longer a reminder for the entire financial sector related to cryptocurrencies, but a clear warning.