The ‘China crypto FUD’ is back again, but it’s misleading |
China’s government is notorious for creating a lot of negative “FUD” around cryptocurrencies. The latest of these rumors is that Chinese police plan to “ban all related events” around blockchain and cryptocurrency, as well as “harshly crack down on related illegal promotion activities.” While the report is vague, it does not say anything about closing crypto exchanges, or banning cryptocurrencies. The Chinese government, like every other government has its own set of rules and laws, and it is the duty of cryptocurrencies to abide by these regulations (or risk being banned).
The Internet is buzzing with crypto-related news, and once again it has to do with China. A couple of days ago, an official document (in Chinese) was released that apparently confirmed that China is banning local crypto exchanges and ICOs. Although the document has since been retracted by the Chinese regulators, the news quickly spread on mainstream media, with all the major news outlets running the story. Unsurprisingly, the value of Bitcoin has dropped again.
China’s bitcoin regulation has been in the news a lot recently, and as is usually the case, the media is painting a very inaccurate picture. The latest rumor is that China is about to block cryptocurrency exchanges, but that’s not quite true. In fact, China has never said they are going to ban cryptocurrency exchanges.. Read more about is cryptocurrency legal and let us know what you think.
Three sector bodies under the Central Bank of China today released a document calling for financial institutions and online payment channels to be banned from providing services related to cryptocurrencies, including but not limited to registration, trading, clearing and settlement. In addition, these institutions will be prohibited from offering savings, trust or security services and issuing financial products related to cryptocurrencies.
In a joint statement, the National Internet Finance Association of China, the China Bank Association and the China Payment and Clearing Systems Association also warned investors against speculative trading in cryptocurrencies, noting that cryptocurrencies are not backed by real assets. Despite blocking cryptocurrency exchanges and initial coin offerings, China has not banned the possession of cryptocurrencies by individuals. The Chinese admit they are researching and learning, but they will stick with the current policy before reaching a conclusion, which is to recognize the legal status of bitcoin, allow individuals to participate, but not Chinese companies and institutions, Chinese journalist Colin Wu wrote on Twitter. Three associations under China’s central bank have issued a document asking institutions not to trade in virtual currencies, urging the public not to trade in virtual currencies and pointing out that transactions in virtual currencies are not legally protected, he added. Slip: Three associations under China’s central bank have issued a document urging institutions not to engage in transactions with virtual currencies. They urge the public not to participate in virtual currencies and point out that transactions with virtual currencies are not legally protected. – Wu Blockchain (@WuBlockchain) May 18, 2021
Not issued by the government?
The statement also stressed the need for individual investors to understand the key features of virtual currencies and related trading activities, pointing out that their prices can be easily manipulated and that foreign exchange contracts are not protected by Chinese law. The altcoin market in China has seen a surge of interest recently, which has caught the attention of the China Internet Finance Association. However, the fact that the document was issued by an association and not the Chinese authorities shows that it has not yet reached a higher level of government oversight, Wu Blockchain said. The latest restrictions are part of the country’s plans to launch its own digital currency, the Digital Currency, e-payment (DCEP).
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The crypto market is always in a state of constant flux and change, with new developments or regulations seemingly popping up almost on a monthly basis. This week, a new piece of FUD – fear, uncertainty, and doubt – about China has hit the market. On May 23rd, a report released by the China Banknote Printing and Mining Corporation stoked fears that China would not only ban all cryptocurrency trading, but also close all bitcoin mining operations in the country. In the past, similar reports have been proven to be false. As with previous rumors, industry experts and skeptics agree that this too is a part of the FUD spread by those looking to capitalize on market uncertainty.. Read more about what is crypto trading and let us know what you think.
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