The central bank in China has started a fresh suppression campaign on crypto in the country’s financial hub of Shanghai after President Xi Jinping said the country needed to speed up the development of blockchain technology, according to a report by Reuters.
Financial regulators in Shenzhen also made a similar move, even after plans by the People’s Bank of China (PBOC) to launch a Chinese cryptocurrency of its own. PBOC headquarters released a statement that said it would not tolerate illicit activities involving crypto, and the bank also said it was important for investors to differentiate between blockchain and digital coins.
“The issuance, financing and trading of virtual currencies involve multiple risks,” PBOC said, adding that it would go after all illegal activities.
Bitcoin has dropped 20 percent in value in the month of November, and it continued to drop after the announcement from the PBOC. In 2017, China decided to go after cryptocurrencies as vehicles of illegal activity, but after Jinping’s announcement interest and usage spiked.
The PBOC also said there were no new digital currencies issued by the bank, or any trading platforms that it had authorized for use. The bank said it caught 13 platforms for digital coin offerings (ICOs) and 10 digital currency trading platforms, when it went after the issue last time.
The bank said it was still testing its own digital coin offering. China’s proposed digital currency is called Digital Currency Electronic Payment (DCEP), and it’s a response to Facebook’s proposed Libra cryptocurrency.
In October, China’s congress has passed a cryptography law to promote crypto development and ensure sound cybersecurity.
The law will regulate the use of cryptography, facilitate the cryptography business and establish cybersecurity, according to the NPC Constitution and Law Committee. According to the law, “the state encourages and supports the research and application of the science and technology in cryptography and protects the intellectual property rights in cryptography.”
The decree also underlines the training of talent in cryptography and will offer awards for “outstanding contributions.”
Under the new regulation, cryptography will be organized into commercial crypto, as well as core and common, which will be governed by special authority and utilized to keep national secrets secure.