Chinese Government Publishes Notice Against Heavy Use Of Crypto
The Chinese government has published a notice against the use of cryptocurrencies. With a new influx of cryptocurrency promotional activity undertaken in China, many organizations have started to adopt digital assets in ways the authorities say violate previous rules implemented in 2017 that forbade ICO’s and other digital asset activity, The Tokenist published.
Now, the authorities are declaring that cryptocurrency trading has resurfaced throughout the country, stating several companies have infringed the country’s earlier implemented rules, which it says are still in force.
The agencies that collectively published the warning on December 27 involve the Business Management Department of the People’s Bank of China, the Beijing Local Financial Supervision and Administration Bureau, the Beijing Banking and Insurance Regulatory Bureau, and the Beijing Securities Regulatory Bureau.
Companies have been told not to render services related to cryptocurrencies. Investors have also been directed to report any breaches to the appropriate agency.
The government, though, has been actively executing blockchain technology. The People’s Bank of China (PBoC), is proceeding to expand its national digital currency, i.e., ‘Digital Currency Electronic Payment’ (DCEP). The digital currency is secured 1:1 to the yuan, China’s national currency.
DCEP is supposed to launch in early 2020. China’s only authorized digital currency, it was both produced and approved by Beijing, making it significantly distinct from most stablecoins. Cryptocurrencies, including Bitcoin, are not granted legal tender in China.
The Bank of China – one of the biggest state-owned commercial banks in the country — issued $2.8 billion worth of bonds using blockchain technology. The bonds were adopted as part of small business loans and leveraged China’s own individually built private blockchain.
In enhancement to tokenized bonds and its national digital currency, China wants to bring blockchain to another area of finance: securities. Weimin Guo, the chief scientist at the Bank of China, lately declared that China is developing a structure for security token offerings (STOs). Security tokens symbolize the union of traditional financial securities with blockchain technology, bringing several new benefits to an antiquated system.
Once DCEP is rolled out and operational, China will acknowledge STOs in its jurisdiction, according to Guo. Initially, however, they will have to comply with a “strict regulatory sandbox mechanism.”