As a result of a joint statement released by China’s central bank and nine other government departments, any economic activity utilising “cryptocurrency” is considered “illegal financial activity” and therefore banned under Chinese law.
Illegal financial activities include the operation of bitcoin exchanges in other countries that offer internet services to Chinese citizens. By banking institutions and other non-bank payment companies, the supply of cryptocurrency-related services is strictly forbidden.
According to government authorities, China is anticipated to tighten regulations on internet content and access, market entity registration, and cryptocurrency promotion in the coming years.
China’s National Development and Reform Commission (NDRC) issued another notice against cryptocurrency “mining” on the same day as the previous one, in an effort to boost its efforts to cut carbon emissions.
According to the National Development and Reform Commission (NDRC)
China aims to tighten rules on all elements of cryptocurrency mining, including new mining operations, and to impose severe limitations on current operations, including existing mining operations. In accordance with the study, this type of behaviour should be categorised as “to be eliminated.”
Both the provision of electricity to cryptocurrency miners and the offer of financial assistance to new cryptocurrency mining operations are forbidden for companies engaged in the generation of electricity for a living.
The law company behind Out-Law, Pinsent Masons, stated, “We have taken note of China’s ongoing activities and efforts to crack down on cryptocurrency and blockchain-related enterprises.” The trading and mining of cryptocurrencies are both prohibited in the United States. The course of this industry’s policies has shifted dramatically in recent years. Virtual currency mining has flourished in China’s central-western provinces, resulting in a rich business opportunity.
While this may be true, the Chinese government has restricted the amount of electricity made accessible to virtual currency miners since they consider it to be a high-energy-consuming activity, according to the Chinese government. He went on to explain that a rising number of miners were leaving for countries other than their home country.
After announcing that it would retain its strict control over cryptocurrency trading in August, the People’s Bank of China followed through on its promise. China announced in May that it would prohibit financial institutions and payment businesses from providing cryptocurrency trading services and that it would advise investors against participating in the cryptocurrency market.