China's central bank told the country's banks cryptocurrency trading is prohibited. The order shows how concerned the authorities are about the spread of speculation in the new asset class.
The People's Bank of China in September 2017 announced an immediate ban on initial coin offerings, declaring them illegal and a threat to financial stability. Since then several Chinese cryptocurrency operators have moved to other Asian hubs and even as far away as the U.S.
An internal note issued earlier this week, the central bank stated that banks should carry out self-inspection and rectification, and that services for cryptocurrency trading are prohibited.
Enforcement Measures
The central bank said that measures should be adopted to prevent payment channels being used for cryptocurrency settlement, the note went on to say. «The South China Morning Post», a Hong Kong-based newspaper, reported it had seen the internal order.
The action is the most serious enforcement measure to date and reflects the deep concern of central government and financial regulators that losses incurred through cryptocurrency speculation by investors could potentially harm social stability.
