Central Bank of China bans businesses from offering bitcoin-related services

Key facts:
  • Software maker Beijing Qudao Cultural Development had its cryptocurrency, Mao Li Coin.

  • Since May 2021, the Chinese government has banned cryptocurrency trading.

The Central Bank of China (PBOC) and Beijing’s Local Municipal Financial Supervision Office have ordered the closure of software manufacturer Beijing Qudao Cultural Development Co Ltd for allegedly providing software services for cryptocurrency transactions. Authorities ordered the company to cease operations and close its website.

The Beijing Financial Conduct Authority and the Business Administration Department of the People’s Bank of China pointed out that companies cannot offer advertising services to cryptocurrency-related organizations, including the supply of commercial premises, commercial exhibition, marketing, public relations and traffic announcements, etc.

Beijing Qudao Cultural Development he was mainly engaged in the entertainment industry.

The information was released today July 6, 2021 by the Central Bank of China. In the statement you can read the following:

In order to implement the decision-making and deployment of the CPC Central Committee and the State Council on combating virtual currency transactions, prevent and control the risk of speculation in virtual currency transactions, and protect the security of people’s property, recently, the Chinese Beijing Municipal Financial Supervision and Management jointly, the Business Administration Department of the People’s Bank of China, the Huairou District Government Department, the Access Culture Development Department of Beijing Co., Ltd., which is suspected to provide software services for virtual currency transactions, has been cleaned and ordered to cancel the company and the official website has been disabled.

Business Administration Department of the People’s Bank of China.

Both government entities warn local institutions not to offer information about cryptocurrencies to commercial premises, nor in business exhibitions, advertising of marketing, paid diversion and other services for business activities related to virtual currency.

At the same time, they remind the large number of consumers to improve risk awareness, establish a correct investment philosophy. Therefore, they urged them not to engage in virtual currency trading speculation activities to prevent the illegal use and disclosure of personal information. Timely reporting of virtual currency transactions related to illegal leads, suspected illegal crimesit must be reported promptly to the public security organs, they say.

However, it is not clear whether the company offered these services. Blockchian journalist Colin Wu, note through its Twitter account that this Beijing company used to be mainly engaged in the entertainment industry, with its own virtual currency called “Mao Li Coin” (meaning cat coin).

The Chinese authorities are calling for timely reporting of virtual currency transactions related to illegal leads. Source: Twitter.

China’s restrictions on ending bitcoin

These limitations of the Central Bank of China to bitcoin go back a long time. In May 2021, the Chinese government announced its ban on cryptocurrency trading and the law regulating the ban on cryptocurrency mining and, in addition, the Central Bank of China announced that they will close the account of users when they catch or are suspected of trading cryptocurrencies. However, the most recent was the one that happened on June 21 when it banned the banks process transactions in cryptocurrency, as reported by CriptoNoticias.

On that occasion, the People’s Bank of China issued a notice to all banks and institutions it was to implement. The notification read as follows: “On Bitcoin risk prevention” and the “Announcement on token issuance financing risk prevention”, among other regulatory commitments.

China has also repressed mining as part of its plan to “take down bitcoin,” a report by analysts at financial services firm Galaxy Digital revealed. The company assured that the decisions made by the Committee on Development and Financial Stability (FSDC) are based on political rather than economic considerations, feeling unable to censor the network.

These limitations seem to indicate that China does not want close competitors with the digital yuan, whose implementation has been accelerating since 2020. The request was made days after a group of central banks– of which China is not a part-produced a document specifying how national digital currencies should be designed.

“We must build an independent, high-quality financial infrastructure, accelerate the pace of research and development of the central bank’s digital currency, and ensure that pilot tests prove that the digital currency is controllable and protects the security of payments,” Chen Yulu, vice governor of the Chinese Central Bank, said in statements to the press.

But other countries, such as El Salvador, do not think that ending bitcoin is the solution to improve their economies. The Central American nation passed the Bitcoin Law to give bitcoin status as a national circulation currency. Regulations that will be supported by a regulation that is expected to be ready on September 7, 2021 for its implementation, with which they hope to attract new investments and the development of industries in that country.

This decision of the president of El Salvador, Nayib Bukele, has contributed to give greater strength to bitcoin. At the time of writing its price is USD 33,912 with an increase of 0.70% in the last 24 hours.

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