The People’s Bank of China (PBoC) sketched out an agenda for 2018. According to this agenda the future of crypto in china has come under discussion again. China had to take this step to protect the national currency of China which is no doubt Yuan. Furthermore, according to a statement dated March 29 on the PBoC website, China will continue to apply strict measures against all kinds of virtual currencies to protect Yuan.
Background of Cryptocurrencies in China
We would have to go a couple of years back to properly understand the situation cryptocurrencies are facing right now in China. According to the initial coin offering news few years back, Bitcoin had gained great popularity among the Chinese Citizens, prices were also going up steadily.
Concerned with the progress of Bitcoin and other cryptocurrencies,in December 2013 the People’s Bank of China along with some other ministries of China, published an official notice regarding Bitcoin. Originally this notice was meant to reduce or control the financial risk of Bitcoin. Several points were highlighted in that notice pertaining to the risks involved in the sale and purchase of cryptocurrencies.
Salient Features of Notice Against Cryptocurrencies
According to the above mentioned notice the People’s Bank of China strictly ordered that:
- All companies offering Crypto-related services especially Bitcoins, must be registered with the relative government ministries.
- Organizations dealing specially in Bitcoin-related services should implement necessary measures to prevent money laundering and other illegal activities.
- Any kind of criminal activity such as fraud, money laundering and gambling etc should be reported instantly to the authorities.
- Companies behind the deals of Bitcoin and all such services should educate the public about Bitcoin and the technology behind it. This measure will save the majority of laymen from frauds, and fake companies would not be able to mislead the public with misinformation.
- Bitcoin can only be bought or sold in its original form and not to be exchanged with traditional currency at any cost.
- Rather than money, cryptocurrency can be best defined as something that serves as a medium of exchange or a store of value.
China’s Latest Approach Against Cryptocurrency
The deputy governor of the People’s Bank of China Fan Yifei outlined objectives in protecting the yuan at the 2018 national video conference. It was a serious effort dedicated to the major challenges faced by the Chinese monetary system in terms of Yuan.
In his statement Fan supported the development of a government based digital currency in order to protect the yuan against unofficial virtual currencies. However, as was done in the past, no specific policies against crypto currencies were offered this time.