Crypto Trade in China Tightened With New Forex Rules

Crypto Trade in China Made Tougher With New Forex Rules

Crypto Trade in China Will Be Tougher Now

New rules have come up for the banks in China to flag risky transactions. These include transactions involving cryptocurrencies as well. This way, it will now be more difficult to buy and sell Bitcoin or any other crypto token using the yuan.

The State Administration of Foreign Exchange has made it mandatory for the banks to monitor and report any ‘risky foreign exchange trading behaviours.’ This includes cross-border gambling, underground banks, and illegal cross-border financial activities involving cryptocurrencies. 

It is predictable that the authorities in China will keep bringing new regulations to make crypto-trading more and more difficult with time. The new rules are for all local banks in China’s mainland. 

China’s Crypto Crackdown 

It is noteworthy how the country’s attitude toward the cryptocurrency market has changed in the past years. China was once a leading country in Bitcoin transactions. However, it changed in 2017 when all crypto exchanges and ICOs (initial coin offerings) got banned overnight. 

As a result, all then-crypto exchanges had to shut their operations within the country and shift abroad. Since then, exiled exchanges like Binance, OKX and Huobi have operated but earned recognition in the industry.

China’s anti-crypto stance intensified further in 2021 when the communist government there closed mining operations in Sichuan, Xinjiang and several other regions. Financial and payment institutions offering crypto services were barred too. Overseas crypto services offered to the Chinese residents were declared illegal.    

Bottom Line

It is interesting to know that the government in China still holds 194,000 Bitcoins. However, this it got from raids and seizures of illegal operations carried out over the years. China remains the leading country in central bank digital currency (CBDC) development.