The People’s Bank of China summoned financial institutions to stress that no Chinese citizen can conduct bitcoin transactions.
The People’s Bank of China (PBOC) has called major Chinese financial institutions to a meeting to strengthen a scalable nationwide ban on bitcoin services, Bloomberg reported. The institutions were summoned to help the central bank prevent Chinese citizens from trading bitcoin through over-the-counter exchanges and platforms.
“Banks and payment institutions must strictly enforce … regulatory requirements, seriously fulfill their customer identification obligations and must not provide account opening, registration and registration for [virtual currency-related] activities ”, a translated version of the PBOC declaration read. “Institutions should thoroughly investigate and identify virtual currency exchanges and OTC brokerage capital accounts, and cut the payment link for timely transaction funds … and effectively improve monitoring capabilities and identification. “
China took similar actions to try to ban bitcoin trading in the country in the recent past. However, with this new resolution, the government is now attempting to completely prevent individuals from accessing cryptocurrency. In addition, local banks have been ordered to identify and stop payments from accounts to any institution that can provide bitcoin trading services. This indicates that the latest regulation takes China’s bitcoin ban to a significant new level, threatening to shut off access to the banking system to those who engage in bitcoin trading activities.
The organizations convened to the recent PBOC meeting pledged to increase and improve the inspection capabilities of cryptocurrency activities and to close associated accounts. Organizations that attended the meeting include major payment processor Alipay, Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, and Postal Savings Bank.
Bitcoin mining shutdowns in China
In May, the Chinese State Council called for a strict crackdown on bitcoin mining and trading activities. Since then, several provinces across the country have taken active steps to enforce this crackdown, as have some internet service companies. Baidu like Google and Weibo like Twitter, for example, have been censor keywords related to bitcoin exchanges. And bitcoin miners in Zhundong Development Park in Xinjiang province received a notice in early June demanding that they immediately stop their operations.
Other Chinese provinces have also taken similar measures. The Yunnan Energy Bureau, for example, has asked its subordinate departments to inspect bitcoin mining companies in the area for illegal activities. And more recently, officials from the largest bitcoin mining hub in Sichuan province have would have given orders to shut down regional bitcoin mining operations for inspection.
It is not possible to ban Bitcoin
Representatives of Chinese mining rig maker Bitcoin Canaan spoke advocated against the country’s crackdown on industry, claiming that bitcoin mining decreases wasted energy, helps create jobs and feeds the local economy. But that apparently had no effect.
As a result, China recently demonstrated how the country could move towards an outright ban on Bitcoin with its actions at the national and provincial level.
But perhaps he realizes that it is ultimately a fool’s game, since Bitcoin cannot be banned, and instead it simply seeks to cut off the paths its citizens can use to access bitcoin services – making it harder for the Chinese to buy and sell bitcoin, possibly affecting the whole the price short term. But that can turn out to be the wrong position to take. Instead, game theory is likely to prevail, and the host countries will be the ones who reap the economic benefits of adopting a sovereign independent country monetary good that obsolete all other money.
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