NEW DELHI: The People’s Bank of China (PBOC) – the central bank of China – has heeded the advisory sent by its Shenzhen branch to show zero tolerance to cryptocurrencies.
Following the advisory, PBOC has taken ‘cleansing’ operations of 11 companies that used to deal with cryptocurrencies in the Shenzhen region, according to a report in the South China Morning Post (SCMP) that quoted the state-run Shanghai Securities News.
However, the authorities have not divulged finer details of how the issue was dealt with.
Shenzhen is a global resource centre for computer hardware that includes cryptocurrency mining equipment.
In recent times, this region developed into one of the key bases for China’s digital token investment community, the report adds.
As a global economy, China had sensed danger from crypto to its economy and money market following traders going overboard with their passion for the digital currency.
The authorities had apprehensions that if allowed to grow, cryptocurrency would be a threat to the financial stability of the country. They had targeted Bitcoin and other digital tokens.
How did it all begin?
In February 2021, Shenzhen shut down eight companies for their alleged activities in digital tokens. The Shenzhen branch of PBOC had cracked down on cross-border trading in foreign currencies and stocks which included cryptocurrencies.
The Chinese do not distinguish between foreign currency and cryptocurrency. Both are equal in terms of the damage they cause to their economy. But the Chinese financial experts were okay with foreign exchange earned by trading legal currencies.
Shenzhen’s move against cryptocurrency shows the mood of the Chinese administration. It became more evident in the last few months after the State Council’s Financial Stability and Development Committee, chaired by Vice-Premier Liu He, announced a further crackdown on Bitcoin mining and trading.
Two major operators in China – Huobi, and OKCoin cancelled the business license registration of their respective subsidiaries in Beijing.
BTCChina, which once ran the country’s largest cryptocurrency exchange is quoted in the report saying that it had “completely exited from bitcoin-related businesses” on the mainland.
Following the advisory, PBOC has taken ‘cleansing’ operations of 11 companies that used to deal with cryptocurrencies in the Shenzhen region, according to a report in the South China Morning Post (SCMP) that quoted the state-run Shanghai Securities News.
However, the authorities have not divulged finer details of how the issue was dealt with.
Shenzhen is a global resource centre for computer hardware that includes cryptocurrency mining equipment.
In recent times, this region developed into one of the key bases for China’s digital token investment community, the report adds.
As a global economy, China had sensed danger from crypto to its economy and money market following traders going overboard with their passion for the digital currency.
The authorities had apprehensions that if allowed to grow, cryptocurrency would be a threat to the financial stability of the country. They had targeted Bitcoin and other digital tokens.
How did it all begin?
In February 2021, Shenzhen shut down eight companies for their alleged activities in digital tokens. The Shenzhen branch of PBOC had cracked down on cross-border trading in foreign currencies and stocks which included cryptocurrencies.
The Chinese do not distinguish between foreign currency and cryptocurrency. Both are equal in terms of the damage they cause to their economy. But the Chinese financial experts were okay with foreign exchange earned by trading legal currencies.
Shenzhen’s move against cryptocurrency shows the mood of the Chinese administration. It became more evident in the last few months after the State Council’s Financial Stability and Development Committee, chaired by Vice-Premier Liu He, announced a further crackdown on Bitcoin mining and trading.
Two major operators in China – Huobi, and OKCoin cancelled the business license registration of their respective subsidiaries in Beijing.
BTCChina, which once ran the country’s largest cryptocurrency exchange is quoted in the report saying that it had “completely exited from bitcoin-related businesses” on the mainland.