The People’s Bank of China (Central Bank) has declared all transactions with bitcoin and other cryptocurrencies illegal amid testing of the national digital currency. The website of the regulator informs about it.
“Transactions with virtual currency derivatives are illegal financial activities and are strictly prohibited,” the statement said. They noted that Bitcoin, Etherium and other digital currencies disrupt the functioning of the financial system and are used for money laundering and other crimes.
Prior to this, the PRC limited the use and mining of cryptocurrencies in the regions, but not on a national scale, although in May Vice Premier of the State Council of the PRC Liu He announced the need to tighten requirements for their production and trade. At the end of June, the authorities of the Chinese province of Sichuan, a major center for the extraction of cryptocurrency, banned mining. By June 20, 26 mining companies were cut off from the power supply.
In addition, mining in the first half of June was banned in three more regions of the PRC: Yunnan, Qinghai and Xinjiang. Large miners, including BTC.TOP and HashCow, have already left the country. The use of non-government cryptocurrencies in settlements in China has been prohibited since 2013.
At the same time, the PRC continues to use the digital yuan in test mode since October 2020. This spring, one of the largest retailers, JD.com, began using the People’s Bank of China’s electronic payment system (DCEP) to pay some employees’ salaries, having previously started paying for purchases in this way.
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