The Chinese central bank has announced new measures to reduce the risks of trading cryptocurrencies. The People’s Bank of China pointed to crypto trading and the risks it entailed for the economy and financial stability. In this light, the central bank mentions gambling, illegal practices and money laundering.
The central bank stated that virtual currencies do not have the same legal status as official currencies.
“They are not legal and should not be used as a currency,” the central bankers said. Anyone involved in this trade can count on an investigation.
The People’s Bank of China wants to launch a mechanism to tackle crypto trading. Banks are prohibited from providing an account to people and companies engaged in crypto trading. They are also not allowed to arrange transactions for them. Internet companies are banned from advertising crypto providers and foreign providers of crypto services must be banned.
Finally, the central bank stressed” that it will act harshly ” if the rules are broken. After the publication of the People’s Bank of China, cryptocurrencies came under pressure. Bitcoin lost almost 4000 USD in the rate.