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27 Aug, 2021 10:00

Protect your wallets: China urges citizens to ‘stay away’ from cryptocurrencies

Protect your wallets: China urges citizens to ‘stay away’ from cryptocurrencies

The People's Bank of China (PBOC) has called on Chinese citizens to avoid using virtual currencies, which have not been legalized in the country and are not backed by real value.

Once again, we remind the general public that bitcoin and other virtual currencies are not legal tender and are not confirmed by real value,” the People's Daily portal quoted Yin Yuping, deputy head of the Financial Services Consumer Protection Department at the PBOC, as saying.

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Transactions with cryptocurrencies are purely speculative investments. People need to firmly realize the high degree of risk, stay away from them and thereby protect their wallets,” Yuping said.

China has been increasingly stepping up efforts to ban the circulation of cryptocurrencies in the country. In May, Beijing barred financial institutions from providing any services related to cryptocurrency transactions and reiterated the ban on initial coin offerings imposed by the PBOC in 2017.

The Chinese government also recently outlawed domestic mining of cryptocurrencies – a way of issuing new virtual coins – in a number of provinces, which led to a wave of migration by crypto-miners from China to Central Asia and North America. Before the crackdown, China was the world’s largest bitcoin miner, accounting for nearly 65% of the digital currency mined worldwide.

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At the same time, China has been developing its own virtual currency, known as the digital yuan or e-CNY. Last month, PBOC published a white paper outlining the main goals of the currency, which is differentiated from other digital payment tools by being legal tender, not requiring an actual bank account, supporting offline payments, and providing “managed anonymity.”

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