The People’s Bank of China (China’s central bank) has collaborated with authorities in the country’s capital, Beijing, to shut down a software company alleged to be providing services to crypto-related companies. The company, Tongdao Cultural Development Co., Ltd, has had its website shut down by authorities while they also have been ordered to cease operations.
The latest development is not entirely new and is said to be an enforcement of an earlier crackdown on cryptocurrency-related activities. However, it provides further clarification regarding the country’s stance towards cryptocurrencies and whether local businesses can work with them.
The central bank followed up its shutdown of Tongdao with a “warning that institutions within its jurisdiction shall not provide services to crypto-related companies including provide business premises, commercial display, marketing &PR, traffic ads.” Put simply, software and marketing agencies are also not allowed to work with crypto companies. This requirement had once only applied to commercial banks but now extends to other businesses operating with China.
China’s crackdown also had a stronger effect on the operation of Bitcoin miners, forcing many companies to ship their machines abroad in search of friendly regulation. The global mining hashrate on the Bitcoin network took a nosedive in the aftermath, with miners still setting up their operations within more friendly regions such as North America and Kazakhstan.
For mainstream investors, the PBoC also warned that consumers “do not participate in virtual currency trading hype activities, do not blindly follow virtual currency-related speculative behavior, and beware of personal property and rights damage.”
They are also encouraged not to use “personal bank accounts for virtual currency account deposits, withdrawals, purchases, and sale-related transaction recharge codes, or transfer of relevant transaction funds,” and to report any defaulter to relevant authorities.
It is popular knowledge that China’s crackdown on mainstream cryptocurrencies is expected to set the tone for the impending launch of the country’s digital currency. The digital yuan is also in the trial stage across different sectors and was recently rolled out for local railway systems in Beijing.
