China Bans Its Banks and Payment Companies From Providing Cryptocurrency-Related Services

Financial institutions will not be able to register, trade, clear or settle with digital currencies.
China Bans Its Banks and Payment Companies From Providing Cryptocurrency-Related Services
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Entrepreneur Staff
2 min read
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

On Tuesday, China prohibited its financial institutions and payment companies from providing cryptocurrency-related services. That is, banks and online payment channels will not be able to provide services that involve registration, negotiation, clearing and settlement of digital currencies.

Apparently, this decision is due to the fact that speculative trade and the ups and downs in the prices of digital currencies infringe on the security and property of the people and thus disrupt the normal financial economic order.

Related: 4 Cryptocurrencies You Should Buy This Year

Though the Asian country banned cryptocurrency exchanges, it didn't ban owning them. In 2019, the authorities explained the risks of this type of trade, saying that virtual currencies are "are not supported by real value" and commercial contracts are not protected by Chinese law.

Is the ban new?

Cryptonews explains that this ban is simply a reminder made in a joint statement between the China National Internet Finance Association, the China Banking Association and the China Payments and Clearing Association that was published by Shanghai Securities News and the state news agency, Xinhua.

Likewise, some of the observers and enthusiasts of digital currencies in the eastern country affirm that it is not a new prohibition, and only a reiteration of a law that has existed for a few years.

Related: Elon Musk's Comments Make Bitcoin Fall and Then Lift It

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