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China’s central bank declares victory in cryptocurrency crackdown ahead of the Communist Party’s national congress
- The People’s Bank of China touted its success in curbing onshore transactions of bitcoin in a WeChat post on Monday
- Beijing sees cryptocurrencies and NFTs as a threat to financial stability and completely banned related activities last year
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China’s central bank declared victory in cracking down transaction of virtual assets as part of the effort of maintaining financial stability on Monday, as preparations for the 20th Communist Party’s national congress enter their final stages.
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The People’s Bank of China (PBOC), which regards cryptocurrencies as a potential threat to financial security and capital controls, is grappling with some of the most challenging economic conditions in the country in years, as growth has slowed to its lowest pace since the beginning of the pandemic under Beijing’s unwavering zero-Covid policy.
“[As we] continue to crack down on onshore transactions and the hyping up of virtual assets, the share of global bitcoin trades in China has largely dropped,” the bank’s Financial Stability Bureau wrote in a post to its official WeChat account. China’s proportion of global bitcoin trading dropped to 10 per cent from a peak of more than 90 per cent in 2017, the bureau said in March.
Along with the Financial Stability and Development Committee under the State Council, China’s cabinet, the bureau mainly provides preventive measures and solutions for systematic financial risks, according to its website.
Beijing has been tightening its grip on digital assets for years, including a 2017 ban on initial coin offerings – a type of fundraising ahead of a new cryptocurrency launch, similar to an initial public offering – a complete ban on cryptocurrency trading last year, and a ban in April on the use of non-fungible tokens (NFTs) as financial assets such as securities, insurance, loans and precious metals.
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Still, China remains home to a lot of crypto-related activities.
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