Another day another China crypto-related ban. China has never hesitated to ban cryptos before. It earlier in 2017 banned Initial coin Offering (ICO). It had also been considering banning crypto mining due to the rising costs. The mining also brought challenges as miners would also steal electric power.
Through the years, the country is ever placing restrictions on cryptocurrency commerce.
The latest in a row of restrictions is the People’s Bank of China (PBOC) call to ban crypto issuance. The central bank is collecting public comments to stop the digital currencies.
The document seeks to stop any unit from creating or reselling crypto tokens. It also bars the circulation of coupons and other currencies that rival the Chinese Yuan.
One of the concerns in crypto Regulations has been defining the scope. The new proposal defines the Chinese Yuan as the physical aspect and digital form. It looks to protect the national currency.
The law targets the stablecoins issuers. This is to avoid any direct competition. It prohibits any entity from creating or using symbols that would also compete with the Yuan.
The law provides for a fine of five times the proceeds from such sales. It also wants digital currency issuers to halt operations and lose their earnings.
The new laws will replace the 2003 central banking laws. They have been the guide for the financial sector through the past years. The growth of the crypto world calls for changes to accommodate the new assets. If the law passes, it will be the first time China has cryptocurrency laws in writing.
The focus on Yuan’s competition is a move to the future of the currencies. The Chinese government is planning to release a central bank digital currency. Banning the other cryptos is the only sure way to ensure it prospers.