[New Tang Dynasty Beijing time September 25, 2021]The top ten regulatory authorities of the Chinese Communist Party recently jointly announced that virtual currency does not have the same legal status as legal tender, and any business transactions related to virtual currency are illegal. After that, the price of Bitcoin fell sharply.
According to comprehensive media reports, on September 24, the top ten regulatory authorities of the Communist Party of China jointly issued the “Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Speculation”. The notice stated that virtual currencies do not have the legal status equivalent to legal currencies and any virtual currency All business activities are illegal.
The notice regards the provision of services by overseas virtual currency exchanges to residents in China via the Internet as illegal financial activities.
The notice requires relevant departments to “strictly prohibit” and “ban” virtual currency exchange business, virtual currency derivative transactions, and various fund-raising and futures businesses.
The ten major regulatory agencies are the People’s Bank of China, the Cyberspace Administration of the Communist Party of China, the Supreme Court of the Communist Party of China, the Supreme Procuratorate, the Ministry of Industry and Information Technology, the Ministry of Public Security of the Communist Party of China, the State Administration of Market Supervision, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the Foreign Exchange Bureau.
After the notice was issued, the price of Bitcoin dropped sharply by US$2,450 to US$41,089.46. This is Bitcoin’s biggest drop in recent days.
The Associated Press stated on the 24th that advocates of cryptocurrency believe that this currency has the advantages of anonymity and flexibility, but the CCP’s regulatory authorities worry that this currency will weaken the CCP’s control of the financial system.
As early as 2013, the CCP restricted banks and payment companies from using cryptocurrency for transactions. But in fact, it has not been fully implemented. The Chinese Communist Party’s regulatory authorities have always adopted an attitude of turning a blind eye to Bitcoin mining and trading.
On May 21 this year, Vice Premier Liu He announced at the Financial Stability and Development Committee meeting to crack down on Bitcoin mining and trading.
At the same time, several major cryptocurrency exchanges have suspended some services for mainland users. Other mining pool operators, such as Huobi and BTC.TOP, have suspended their business in China.
Yang Cong (a pseudonym), a veteran mainland industry insider, told The Epoch Times that the CCP is afraid of cryptocurrencies for three reasons. First of all, cryptocurrency is the mortal enemy of totalitarian countries. Its decentralized nature makes it impossible for the CCP to manipulate the exchange rate, currency issuance, or inflation and deflation to plunder the people.
In addition, cryptocurrency has the characteristics of freedom, democracy, and truth, and may therefore rebuild a new social order and social structure. This can be said to have moved the foundation of the CCP.
Secondly, the Central Bank of the Communist Party of China announced in October last year that it would implement “digital renminbi”, and it plans to operate during the 2022 Winter Olympics. It has now begun to implement it to domestic financial institutions. In order to ensure that the officially issued digital renminbi is the only one, it is also the main reason for the crackdown on cryptocurrencies.
Furthermore, a large amount of renminbi or U.S. dollar reserves, in order to seek a safe haven, use the anonymous and anti-counterfeiting features of cryptocurrency to flow overseas. This is also the CCP’s concern.
(Reported by reporter Liu Minghuan/Editor in charge: Wenhui)
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