China’s central bank said on Monday (21/6/2021) it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading.
The People’s Bank of China’s meeting with institutions including Agricultural Bank of China (AgBank) and Alipay came after China’s State Council, or cabinet, last month vowed to crack down on bitcoin trading and mining.
The PBOC urged institutions to launch thorough checks on clients’ accounts to identify those involved in cryptocurrency transactions, and promptly cut their payment channels.
“Speculative trading in virtual currencies roils economic and financial order, spawns the risks of criminal activities such as illegal asset transfers and money laundering, and endangers people’s wealth,” the PBOC said in a statement.
Other participants in the PBOC’s meeting included state-owned China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and Postal Savings Bank of China.
After the central bank’s notice, AgBank, ICBC, CCB and Alipay all released separate statements saying they would conduct due diligence on clients to root out illegal crypto-related activities and shut down suspicious accounts.
As China ramped up its campaign against cryptocurrencies in recent weeks, bans on cryptomining have been issued in major bitcoin mining hubs, including Sichuan, Xinjiang, and Inner Mongolia.
China has also blocked a slew of cryptocurrency-related social media accounts, and barred the search for major cryptocurrency exchanges such as Binance and Huobi on baidu.com and Twitter-like platform Weibo.
Bitcoin tumbled almost 10 per cent on Monday as recent volatility in the cryptocurrency market showed no signs of dampening down, with market players citing jitters over China’s expanding crackdown on bitcoin mining in thin liquidity for the losses.
The world’s biggest cryptocurrency, long plagued by volatility, has lost over 20 per cent in the last six days alone and is down by half from its April peak of almost $65,000. Still, it has still gained over 10 per cent this year.
Companies that mine bitcoin - an energy-intensive process - typically hold large inventories of the cryptocurrency, with any moves to sell large amounts depressing prices.
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