The People’s Bank of China (PBOC) heeded the Shenzhen Branch’s warning that cryptocurrencies would be treated with zero tolerance.
According to a South China Morning Post (SCMP) report citing state-sponsored news from Shanghai Securities, the PBOC “cleansed” 11 companies in the Shenzhen Region that used the cryptocurrency advisory.
However, no information on a solution to the problem has been released by the authorities. Shenzhen is a global hub for computer hardware, including cryptocurrency mining equipment.
According to the report, China’s digital token investment community has recently emerged as one of the region’s key foundations.
After traders went overboard with their enthusiasm for digital currency, the global economy saw crypto as a threat to the economy and money market.
The authorities were concerned that allowing cryptocurrency to grow would jeopardise the country’s financial stability. They desired to target Bitcoin and other digital tokens.
How did it all start?
In February 2021, Shenzhen shut down eight firms for alleged digital token businesses. The PBOC branch in Shenzhen had targeted cross-border trading of foreign currency and stocks, including cryptocurrencies.
The Chinese make no distinction between currency and cryptocurrency. Both of their economies are equally damaging. Chinese financial experts, on the other hand, may accept foreign exchange earned from trading legal currencies.
The move by Shenzhen against cryptocurrency reflects the mood of the Chinese government. The announcement of a new Bitcoin-style mine and trade crackdown by the State Council Financial Stability and Development Committee, led by Vice-Premier Liu He, has been more visible in recent months.
Huobi and OKCoin, the two largest Chinese exchanges, both revoked the registration of commercial licences for their respective Beijing subsidiaries.
According to the report, BTCchina, which once had the largest cryptocurrency exchange in the country, has “completed its exit from bitcoin-based businesses.”
What sets cryptocurrency apart from stock exchanges?
Since its introduction into the trading world in 2009, cryptocurrency has grown at an alarming rate.
While crypto-monetary activities continue to pique investor interest, many people frequently confuse the crypto-monetary market with the stock exchange.