China reiterates warning against cryptocurrency use in transactions
Eileen Yu, 19 May 2021
Three state-backed financial groups in China have issued a joint statement warning against the use of cryptocurrencies as payment, citing their volatility as a high risk. They further remind industry players that digital currencies cannot be used in any financial activities in the country.
National Internet Finance Association of China, China Banking Association, and Payment and Clearing Association of China said Tuesday that its members should not be involved in transactions dealing with cryptocurrencies. These included activities encompassing intermediary services that facilitate trading as well as the exchange of fiat money.
The three groups collectively represent local online companies that provide financial services, local banks, and payment companies.
Their joint warning came in a week that had seen Bitcoin’s value dip significantly following Tesla’s Elon Musk announcement his company had halted use of the cryptocurrency over concerns about its impact on the environment.
Without singling out Bitcoin, the three industry groups said cryptocurrencies were not recognised by China’s central bank and had been flagged for their financial risks as well as potential ties to money laundering. They noted that virtual currencies had no real value and prices were easily manipulated.
