People’s Bank of China bans Bitcoin again

The People’s Bank of China reposted a September 15 memo that discusses the country’s Bitcoin ban on its website, causing Bitcoin to sell widely and prices to drop on Friday morning.

The People’s Bank of China (PBOC) reissued a note from September 15th which resolves the country’s Bitcoin ban on their website, causing Bitcoin to sell widely and prices to drop on Friday morning.

The memo describes a nationwide crackdown on Bitcoin and other cryptocurrencies out of concern about them “disrupting the economic and financial order, spawning illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes and money laundering, seriously endangering the security of people’s property.

The People’s Bank of China has still called leading financial institutions in China to strengthen a nationwide scalable ban on Bitcoin trading and transactions. Institutions have been urged to help the central bank prevent Chinese citizens from trading Bitcoins through exchanges, both domestic and foreign, and over-the-counter platforms.

The note called on all relevant entities of the Chinese central government to cooperate in order to:

1. Clarify the essential attributes of virtual currency and related business activities.

2. Establish and improve a working mechanism to deal with the risks of virtual currency trading.

3. Strengthen risk monitoring and early warning of speculation on virtual currency exchanges.

4. Build a multidimensional and multi-level risk prevention and elimination system.

The memo stressed that Bitcoin is “not legal and should not and cannot be used as currency in the market or in circulation”, and clarified to what extent “virtual currency-related business activities are illegal financial activities. “.

The PBOC details how interdepartmental efforts are needed to shut down exchanges and ramps to Bitcoin and other cryptocurrencies, and to penalize suspected parties involved in the distribution of Bitcoin or crypto securities in order to “maintain economic and financial order and social harmony and stability. ” The language of the memo sometimes slides from majestic and bureaucratic to an idealized utopian vision.

Perhaps most frightening for Bitcoiners is the PBOC’s public wish to thoroughly monitor citizens both online and offline with the goal of “improving the accuracy and efficiency of identification and the discovery of virtual currency hype activities ”. The statement then claims to have state-of-the-art technology for full real-time tracking of blockchain transactions and information relating to newly mined coins, their transaction and exchange.

The PBOC also makes it clear that it intends to deal quickly with any perceived violation with its “rapid response mechanisms” by forcing residents and institutions to target any suspected violators.

“According to the clues provided by the financial management department, the competent network information and telecommunications authorities must quickly shut down Internet applications such as websites, mobile applications and small programs that carry out commercial activities. related to virtual currency in accordance with the law. . ”

The PBOC goes so far as to ban the commercial and even domestic use of words or content related to Bitcoin and cryptocurrencies, the language police being of course the mark of an authoritarian state regime.

The memo advocates that all state entities practice swift and strong internal self-discipline measures on member units that commit Bitcoin or cryptocurrency-related offenses.

The general message the PBOC is sending is that the state will continue to crack down on Bitcoin with renewed urgency, “high pressure” and will continue to dynamically monitor a currency it sees as a great risk to the population.

China’s interest in banning Bitcoin is nothing new. The communist country’s ability to remove access to popular Bitcoin on and off ramps may grow, but it is impossible for them to completely stop peer-to-peer transactions.

Overall, China’s renewed Bitcoin ban betrays their complete inability to stop it.

Notably, the price of Bitcoin has increased by $ 40,000 since China’s first ban. The country’s efforts to ban bitcoin mining last summer and thus harming the network, resulted in a global redistribution of the hashrate and renewed interest in Bitcoin mining across the board, as the lower hash rate of the network allowed new entities to start operating at a lower price.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Comments are closed.