[New Tang Dynasty Beijing September 24, 2021]On September 24, the People’s Bank of China issued a notice on the rectification of virtual currency trading and mining activities, including all virtual currency services as illegal activities and prohibiting mainland citizens from passing overseas exchanges Conduct related transactions. In addition, mining activities are classified as “eliminated industries.”
According to the “Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Hype” issued by the People’s Bank of China, “Virtual currencies do not have the same legal status as legal currencies. Virtual currencies such as Bitcoin, Ethereum, and TEDA coins are issued by non-monetary authorities, The main characteristics of using virtual technology, distributed accounts or similar technologies, and being in digital form, are not legally compensatory, and should not and cannot be used as currency in the market.”
The notice also stated that the Beijing authorities strictly prohibit virtual currency exchange, trading, issuance financing, and derivative transactions, and those who violate the law will be held criminally liable. Financial institutions and non-bank payment institutions are prohibited from opening accounts, fund transfers, and clearing and settlement services for virtual currency-related businesses. Virtual currencies cannot be included in the scope of collateral, and virtual currencies cannot be included in the scope of insurance liability.
It is worth noting that Beijing also prohibits overseas virtual currency exchanges from providing services to mainlanders through the Internet. The notice stated: “The provision of services by overseas virtual currency exchanges to Chinese residents through the Internet is also an illegal financial activity.”
The departments that jointly issued the rectification notice also include: the National Development and Reform Commission, the Central Propaganda Department, the Internet Information Office, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration of Taxation, the Municipal Supervision Bureau, the China Banking Regulatory Commission, and the National Energy Administration.
On the same day, the above ten institutions also issued a notice on “Remediation of Virtual Currency Related Mining Activities”, listing mining activities as “eliminated industries.” It is claimed that the notice is aimed at strengthening the supervision and investigation of virtual currency mining activities, prohibiting public investment, and prohibiting new virtual currency mining projects in order to speed up rectification and elimination. It made Bitcoin plummet after hearing the news.
However, while banning virtual currencies, the Chinese Communist Party is vigorously promoting the upcoming “digital renminbi” (or digital renminbi). Officials said that the big difference between digital renminbi and Bitcoin is that it does not use blockchain technology, but uses a real-name system.
According to Fox and Associated Press reports, this will give the CCP the power to “monitor” the flow of funds. Since every transaction must be registered under real names, the Chinese cannot even escape the party’s attention when buying a cup of coffee.
The People’s Bank of China issued a white paper in July that it will expand the “digital renminbi” test object during the 2022 Beijing Winter Olympics, including international business people and overseas tourists, and it can be used without opening a local bank account. .
These new pilot measures soon attracted the concern of the US Congress and demanded that the US Olympic and Paralympic Committee (USOPC) prohibit athletes from acquiring or using digital renminbi during the Winter Olympics.
In a letter to the U.S. Olympic Committee President Susanne Lyons, the lawmakers said: “The digital renminbi may be used by Beijing to monitor Olympic athletes.”
“Although the CCP insists that their efforts are to achieve the digitization of banknotes and coins, Olympic athletes should note that these digital renminbi may be used to monitor Chinese citizens and people visiting China, and the (surveillance) scale will be unprecedented. Yes, they (the CCP) want people to keep their digital renminbi wallets on their smartphones and continue to use them when they return.”
(Reporter Chen Beichen Comprehensive Report / Chief Editor: Lin Qing)
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