In its latest effort to crack down on crypto trading activities, the central bank ordered attending banks to cut off any funding channels for crypto OTC merchants if found. The People’s Bank of China issued a statement on Monday, saying that it has recently summoned a meeting with several domestic banks and mobile payment service providers. China is also tightening its laws on crypto mining.
PBoC summons domestic banks to carry out its order.
The banks and payment services firm summoned by PBoC included the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), the Construction Bank of China (CBC), Postal Savings Bank of China, the Industrial Bank, as well as mobile payments app Alipay. The PBoC said the speculative activities around crypto trading have severely disrupted the balance of China’s financial system, creating the risk of illegal capital outflow across the border and money laundering. The central bank reiterated its 2017 stance – no financial institutions should provide banking and settlement services for crypto-related transactions.
Banks asked to immediately cut off their payment and funding channels to OTC platforms.
The PBoC ordered that the banks should check if any crypto OTC traders are using their services to provide on- and off-ramps for Chinese traders in a peer-to-peer fashion. “The institutions should immediately cut off their payment and funding channels,” the central bank said. The Chinese central bank also demanded that the attendees improve their internal monitoring algorithms to analyze the characteristics of crypto-related transactions. All major financial service providers issued a similar notice, stating that they would terminate the accounts and report the issue to the relevant authorities if any users were found dealing with crypto transactions.