Chinese Central Bank Warns Big Banks and Payments Platforms over Cryptocurrency Speculation


The People’s Bank of China (PBOC) has summoned a number of Chinese banks and payments platforms for discussions concerning speculative trading in cryptocurrencies such as Bitcoin.

PBOC recently convened discussions with Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), China Construction Bank (CCB), Postal Savings Bank of China (PSBC), Industrial Bank Co., Ltd. and Alipay on the provision of services in relation to cryptocurrency speculative trades, according to an announcement made by PBOC on 21 June.

PBOC said that the purposes of the discussions were to “strike against speculative transactions in virtual currencies such as Bitcoin, protect the asset security of the people and maintain financial security and stability.”

“Speculative trading in virtual currencies disrupts the regular economic and financial order, and leads to the risk of a proliferation in illegal criminal activities such as illegal cross-border asset transfers and money laundering, severely harming the asset security of the people,” said PBOC.

“All banks and payments organisations must strictly implement regulatory provisions including the ‘Notice Concerning the Prevention of Bitcoin Risk’ (关于防范比特币风险的通知) and the ‘Public Notice Concerning the Preventing of Token Issuance Financing Risk’ (关于防范代币发行融资风险的公告).

“[They] must earnestly implement client identification duties, and are not permitted to provide products or services such as account opening, registration, trading, clearance and settlement for related activities.”

PBOC further required that all banking and payments institutions:

  • Comprehensively inspect and identify the fund accounts of cryptocurrency exchanges and off-site vendors, and promptly sever transaction fund payments chains.
  • Analyse the unique features of fund exchanges for cryptocurrency speculative transactions.
  • Expand technological investment.
  • Improve monitoring and control of irregular transactions.
  • Earnestly raise monitoring and identification capability.

PBOC said that banking and payments organisations that participated in discussions will “refrain from undertaking or participating in activities in relation to virtual currencies,” as well as “further expand inspection and disposal capability, adopt strict measures, and thoroughly sever the fund payments chain for virtual currency speculative trading activity.”

The discussions come amidst a crackdown on Bitcoin mining operations across China launched by the country’s provincial authorities, including those for Inner Mongolia, Qinghai and most recently Sichuan.

Beijing effectively snuffed out China’s Bitcoin market in September 2017 by launching a ban on domestic exchanges and initial coin offerings (ICO). 

Chinese regulators have firmly upheld the ban ever since, with the securities authority reportedly ordering its regional offices to step up scrutiny of domestic Bitcoin trading in March 2021 following a surge in prices abroad.

That month China’s top prosecutor also announced that it would step up efforts to prevent the use of the cryptocurrency for money laundering purposes.