China bans financial & payment institutions from cryptocurrency transactions
By Sanjay Maurya
- A cryptocurrency is a form of online payment that can be used to buy and sell products and services.
- China has been barred from providing services related to virtual currency transactions.
- Banks and online payment platforms, must not provide clients with any cryptocurrency-related services.
China bans financial & payment institutions from cryptocurrency transactions
Financial and payment institutions in China have been barred from providing services related to virtual currency transactions, and investors have been warned against speculative trading.
It was China’s most recent effort to stifle an emerging digital trading economy. According to the ban, certain organizations, such as banks and online payment platforms, must not provide clients with any cryptocurrency-related services, such as registration, trading, clearing, or settlement, according to a joint statement released by three industry bodies on May 18th.
About Cryptocurrency
A cryptocurrency is a form of digital money that can be used to buy and sell goods and services online. Blockchain is the technology that allows cryptocurrency to work. Blockchain is a distributed ledger technology that tracks and manages transactions through multiple computers.
America created the eCash cryptographic scheme in 1983. Developed another system, DigiCash, twelve years later, that used cryptography to keep economic transactions private. However, it was in 1998 that the concept or word “cryptocurrency” was first coined.
“Earlier, this currency prices have skyrocketed and collapsed, and speculative trading of cryptocurrency has rebounded, seriously endangering people’s property and upsetting the usual economic and financial order,” three Chinese state-backed associations said during a statement released on May 18th.
The statement emphasized the dangers of cryptocurrency trading, stating that virtual currencies “do not have real value,” that their values are easily manipulated, and that trading contracts are not secured by Chinese law.
China recent history on digital payment
China shut down its local cryptocurrency exchanges in 2017, effectively suffocating a speculative sector that accounted for 90% of global bitcoin trading.
The People’s Bank of China announced in June 2019 that it will block access to both domestic and international cryptocurrency exchanges and Initial Coin Offering websites, including a ban on foreign exchanges, to crack down on all cryptocurrency trading.
