China FUD Back into Effect as Three Self-Regulating Bodies Reiterate Country’s Anti-Speculation Stand on Crypto

The price of Bitcoin went back under $42,700 and is yet again at the center of the inner $42k-$46k range, thanks to the same old China FUD permeating the cryptocurrency market.

Despite being as old as nine years, China banning Bitcoin never fails to induce a market sell-off. And that’s exactly what happened after Reuters reported that China is banning financial institutions and payment companies from providing services to crypto-related transactions.

As Qiao Wang of DeFi Alliance noted, “China didn't just ban crypto. It's reiterating an anti-speculation law from years ago.”

Three Chinese organizations viz. The National Internet Finance Association of China (NIFA), the China Banking Association (CBA), and the Payment and Clearing Association of China (PCAC) jointly issued a note where it reiterates the country’s previous stance on crypto businesses.

All three of these bodies are self-regulatory organizations and not regulatory agencies. They are reiterating the same old stance because they deem speculative crypto trading in the country amidst ongoing market volatility to be “seriously infringing on the safety of people's property and disrupting the normal economic and financial order.” The statement reads,

“Financial and payment member institutions shall not provide insurance services that relate to virtual currencies or directly and indirectly offer crypto-related services for their clients, including but not exclusive to crypto-related trading, custody, lending, and settlement; accepting virtual currencies as a payment tool; exchanging virtual currencies with the Renminbi.”

The statement echoes China’s stance towards crypto space in 2017 when they prohibited ICO activities and banned crypto exchanges from offering fiat-to-crypto services, and at the time, they had the same requirements in place for financial institutions to not be involved directly or indirectly with crypto.

Interestingly, just last month, the vice governor of the People's Bank of China (PBoC) called Bitcoin and stablecoins “investment alternatives” as opposed to currencies.