- Crypto transactions “remain illegal” in China, top officials say.
- The People’s Bank of China’s decision to reveal high-level crypto discussions with ministries “is a first.”
- Experts say Beijing will not accept the return of Bitcoin miners.
China’s central bank has ended talks aimed at easing its sweeping crackdown on crypto, as Beijing called to let Bitcoin miners return.
The People’s Bank of China, also known as PBoC, summoned representatives from government ministries, internet regulators and the judiciary to make a new statement on crypto regulation, according to the Chinese newspaper. Caixin reported.
“Cryptocurrencies do not have the same legal status as legal tender,” the PBoC said. “They are not legal tender. And they should not and cannot be used as currency in the marketplace. All commercial transactions related to cryptocurrencies constitute illegal financial activities.”
As reports continue to circulate in China and elsewhere claiming that illegal mining is on the rise, the chances of the Middle Kingdom adopting Bitcoin appear very low at the moment.
High-level summit
The bank called the meeting on November 28, as part of its efforts to “coordinate ways to combat speculation” in the crypto trading space.
The list of participants attests to the severity of the PBoC’s message. It included representatives from the Public Prosecution Service, the Supreme Court, all of China’s major financial and internet regulators, policy-making bodies and three government ministries.
“This is the first time that regulatory authorities have disclosed details of such a meeting,” Caixin explain.
Chinese media Guandian said the PBoC’s decision to make details of the meeting public was a response to the fact that “crypto speculation has resurfaced” in China.
China has ordered banks to block and report all crypto-related transactions in 2021. It has also banned cryptocurrency mining.
However, the popularity of Bitcoin has not diminished in China. DL News found that over-the-counter trading with sellers and buyers from neighboring countries like South Korea and Japan continues via open Telegram chat rooms.
The bank told participants they should “deepen” their “coordination and cooperation, and improve regulatory policies and legislation” to step up crypto crackdowns.
The PBoC called on parties to “monitor capital flows, strengthen information-sharing networks, further strengthen surveillance capabilities, and severely crack down on illegal and criminal (crypto-related) activities.”
This would contribute, he asserts, to “protecting the security of public assets and maintaining the stability of the economic and financial order”.
Data from crypto miner Luxor Technology shows that China’s share of the global Bitcoin hashrate stands at more than 14%. This figure may come exclusively from illegal mining, but it is eclipsed only by the United States and Russia.
Bitcoin mining ban ‘here to stay’
THE South China Morning Post said that in recent months there have been “growing calls from academics for Beijing to reconsider its rigid ban on bitcoin mining.”
But the same media outlet quoted David Zhang, a macroeconomics and policy analyst at China-focused policy researcher Trivium China, as saying that China’s bold AI goals “would not allow energy-intensive activities that contradict its development goals, such as Bitcoin mining, to persist or expand.”
Yang Liu, a partner at Beijing-based law firm DeHeng Law Offices, said it was unlikely the Chinese government would want to “encourage mining activities in the short term, let alone get involved in mining itself.”
Tim Alper is a news correspondent at DL News. Do you have any advice? Email to tdalper@dlnews.com.
