On Friday, May 21st, China’s State Council’s Financial Stability and Development Committee (FSDC) announced it would restrict cryptocurrency mining and trading activities in the country. Financial institutions and payment companies are now barred from providing customers with cryptocurrency-related products and services. The volatility and decentralized nature of cryptocurrencies stand in opposition to some Chinese government objectives, including maintaining social, political, and economic stability. The new regulations have a direct impact on China’s peer-to-peer payment solutions companies. Alipay, WeChat Pay, and multiple Chinese banks have warned customers against using their services for cryptocurrency-related transactions. Historically, virtual currencies have made Chinese financial regulators uneasy, which has resulted in industry-wide restrictions. To mitigate risk, fintech companies investing in China’s peer-to-peer transactions industry must ensure their compliance and processes are in line with relevant FSDC policies regarding cryptocurrencies.
Written by Eddie Witte – International Business Consultant
Relevant Links:
- https://www.reuters.com/technology/chinese-financial-payment-bodies-barred-cryptocurrency-business-2021-05-18/
- https://www.wsj.com/articles/chinas-latest-crackdown-on-bitcoin-other-cryptocurrencies-shakes-market-11621853002
- https://www.chinadaily.com.cn/a/202105/25/WS60ac4a99a31024ad0bac1258.html
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