China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions.
President Xi Jinping's country has even warned investors not to trade cryptocurrencies that the government considers speculative.
The official announcement was made jointly by the three bodies namely the China National Internet Finance Association, the China Banking Association, and the China Clearing and Payments Association.
Institutions must not provide cryptocurrency savings, trust or guarantee services , or issue financial products related to cryptocurrency ," the statement was quoted as saying Wednesday (19/5/2021).
This move is not the first thing China has taken against digital money. In 2017, Panda Country closed its local cryptocurrency exchange, which accounts for 90% of global Bitcoin trading.
June 2019, the central bank also blocked access to all domestic and foreign cryptocurrency exchanges, including the "Initial Coin Offering" website. The goal is to suppress all cryptocurrency trading with a prohibition on foreign currency exchange,
The statement also highlights the risks of crypto trading. Where the authorities reiterated to citizens that virtual currencies "are not backed by real value", prices are easy to manipulate, and trade contracts are not protected by Chinese law.