China Banned the Use of Bitcoin and Cryptocurrencies

China has banned financial institutions and payment companies from providing services for Bitcoin and cryptocurrencies.

China has banned the use of BTC and cryptocurrencies. The government warned investors against speculative crypto trading, while banning financial institutions and payment companies. According to the ban, such institutions, including banks and online payment channels, should not provide their customers with any services that include cryptocurrencies, such as registration, clearing and settlement, three industry bodies said in a statement on Tuesday.

Bitcoin Banned

In the said statement, “Recently, cryptocurrency prices have skyrocketed and fell. Speculative trading of cryptocurrency has recovered by seriously threatening the security of people's properties and disrupting the normal economic and financial order.” This statement was interpreted as that institutions should not provide savings, trust and pledge services of the cryptocurrencies and should not produce financial products related to the cryptocurrencies. In addition, the statement highlighted that cryptocurrencies are not “supported by real value”, their prices can be easily manipulated, and trade contracts are not protected by Chinese laws, and the possible risks that may arise in cryptocurrency trading were also highlighted.