China, which was talked about in 2021 for its harsh bans on Bitcoin (BTC) and cryptocurrencies, has announced new restrictions.
China has introduced stricter regulations to limit cryptocurrency-related activities, local news agency South China Morning Post reported.
Accordingly, the State Administration of Foreign Exchange of China (SAFE), which is responsible for foreign exchange movements, sent a series of warnings to banks, including cryptocurrencies.
According to these warnings, banks are required to monitor and report “risky forex trading behaviors.” In this context, banks in China are required to identify high-risk transactions by examining the identities of individuals and institutions, sources of funds and transaction frequency.
Experts say the new rules are also expected to reduce underground banking transactions and illegal cross-border payments involving cryptocurrencies.
“The new rules will provide another legal basis to curb cryptocurrency trading,” said Liu Zhengyao, a lawyer at law firm ZhiHeng.
Zhengyao said that these new rules mirror China's ban on cryptocurrencies, saying the government sees cryptocurrencies as a potential threat to financial stability.
*This is not investment advice.
