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The Central Bank of China has once again made it clear that cryptocurrencies are not going to get any kind of exemption in the country. In view of the recent increasing crypto movement, the bank has said that betting on virtual currency is increasing again, which may re-introduce economic risks.
New Delhi. China has once again become strict on the crypto market. The Central Bank there i.e. People’s Bank of China has clearly said that in recent times, speculation regarding virtual currency has increased and this trend is becoming a new problem for them. The bank says that strict action will be taken on every such activity so that there is no instability in the financial system.
People’s Bank of China has clearly stated that digital tokens are not legal tender in any way nor can they be used in normal transactions. The bank has described activities related to digital currency as illegal financial activities. He says that many platforms and individuals try to show it as a payment system or alternative currency, which is against the law.
Keep a close eye on stablecoins
This time China has especially expressed concern over stablecoins. The bank says that these tokens do not meet the rules for customer identification and preventing money laundering. Agencies fear that they could be used for large amounts of wrongdoing, such as money laundering, fraud and sending money illegally out of the country.
What is stablecoin?
Stablecoin is a type of digital token whose value is always linked to a fixed asset. Usually it is kept at par with currencies like the dollar so that the problems of sharp fluctuations in the crypto market can be avoided. Meaning, even if other cryptocurrencies go up and down, the value of stablecoin remains mostly stable. This is the reason why people use it to park money during crypto trading, for fast transfers and for cross-border payments. However, regulators in many countries consider it risky because many stablecoins are not properly backed and can be misused for money laundering, fraud or unapproved fund transfers.
Preparation for strict action
The Central Bank has said that it will take more swift action against such activities so that economic and financial stability is maintained. The bank has already made it clear that there is a complete ban on domestic crypto trading and this rule will not be relaxed at any cost. The bank also said that stablecoin models running abroad will also be continuously monitored.
Crypto mining is returning in China even after the ban
Interestingly, despite the complete ban in 2021, Bitcoin mining is starting again in some areas of China. This is happening both at the personal level and at the corporate level. Due to areas with cheap electricity and newly built data centers, many people are returning to this work again. However, it is still outside the legal scope and the government is trying to suppress it.
