Breaking: China prohibits units and individuals from creating and selling cryptocurrencies
|- The People's Bank of China published a new draft law that seems to prohibit units or individuals from issuing digital tokens.
- This could be the first time the word cryptocurrency has appeared in any of China's formal laws.
The new draft of legal comments clearly states that no individual or unit can produce or sell tokens to replace CNY in circulation in the market. The violation of this law will have severe consequences according to the draft:
For anyone that violates such regulation, the PBoC will halt such activities and forfeit any proceed from the making and selling of yuan-backed digital tokens and issue a fine that is up to five times of the involved proceeds
China has recently pushed for a faster launch of the digital yuan with President Xi actually stating that blockchain is one of the top country's priorities. The revision draft does in fact propose to legalize the digital yuan.
It's important to note that the new draft states that digital tokens backed by the yuan are the ones affected, it doesn't mention traditional cryptocurrencies like Bitcoin and others. Nonetheless, China's ban on crypto trading imposed in 2017 remains in place.
The newly revised draft is also aimed at speeding up the launch of the digital yuan, designed to replace cash in circulation. Commercial banks will be the ones distributing the digital currency to their users, keeping a database that would not be possible with traditional coins and banknotes.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.