China to curb overseas cryptocurrency trading

Getting your Trinity Audio player ready...

Tighter regulations are going to be implemented by the People’s Bank of China (PBOC), which carries monetary policies and regulates financial institutions in the country. Participation in overseas virtual currencies will be more stringently controlled, leading the way to a reduction in domestic participation in Initial Coin Offerings (ICO) and investments.

The controls won’t just cover investments from China’s mainland, either. Exchanges in Singapore and Hong Kong will also be severely limited in which transactions they’re able to process.

According to the central bank, ICO platforms are breeding grounds for illegal offerings, fraud, false information and pyramid schemes. Those that fall outside of the country’s jurisdiction are not able to be controlled domestically, leading the PBOC to block them completely. PBOC officials added that ICOs are a form of unauthorized fundraising and repeatedly have been shown to have ties with criminal activity. The bank also warns domestic investors to be alert for risks and to stay away from digital currency speculation.

Last September, all Chinese cryptocurrency exchanges were forced to close, and a ban was put into effect against all ICOs. Now, China plans to enact measures to protect investors from financial risks and to maintain monetary stability in the country. The PBOC, however, didn’t elaborate on what those measures might include.

The move is one of the driving forces behind the most recent decline in value of virtually all digital coins. As the word spread of China’s position, not only were investors scared off, but even retailers and banks have begun to turn their backs on the market. Stripe and Microsoft both have indicated that they will no longer accept SegWit1X (BTC). Bank of America and the Bank of Scotland are just two of the many financial institutions that have implemented policy to prevent customers from using their credit cards to purchase cryptocurrency.