Important news came earlier of China essentially banning financial services and payment companies from providing crypto-related transactions or services. The ban includes the following directives:
- Financial institutions must not offer their users any crypto-related services. Examples are registrations, clearing, trading, and settlements.
- Financial institutions must not provide trust, savings, or pledging services of any crypto asset.
- Financial institutions cannot issue financial products related to cryptocurrencies.
- Financial institutions cannot accept digital coins as payments, nor can they use them as payments. Furthermore, they cannot deliver crypto exchange services between foreign currencies and the local yuan.
- Payment companies and banks are pushed to focus on monitoring money transactions and flow in crypto trading.
Three leading industry institutions in China made the decision. These are the National Internet Finance Association of China, the Payment and Clearing Association of China, and the China Banking Association.
This is not the first time China has made bold moves against the crypto market industry. In 217, Beijing shut down all its crypto exchanges, while in 2019 the People’s Bank of China said that it would block access to all crypto exchanges and Initial Coin Offering sites, both local and foreign.
This is a major disruptor of the global crypto industry, and we are about to see major consequences around.