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In China, where cryptocurrencies are banned from 2021, the state regulatory agency responsible for foreign exchange transactions sent a new series of warnings to banks. The State Agency for Foreign Exchange Affairs (SAFE) mandated banks to report risky transactions.
Henceforth, banks must report to the institution any transfer or transaction they consider risky. Although cryptocurrencies are prohibited in China, investors have been known to conduct cryptocurrency transactions using VPNs and decentralized financial platforms. Some citizens conduct their transactions through Hong Kong, where cryptocurrencies are not prohibited.
According to Chinese media reports, this new set of rules will seriously complicate and slow down crypto transactions in mainland China.
It is known that in addition to cryptocurrencies, a significant amount of money is spent in China on cross-border payments and non-Chinese gambling platforms, and transfers through banks.
The Chinese state views cryptocurrencies as a threat to financial stability. Underground mining is ongoing in the country. China, which was the world’s mining hub before 2021, fell to second place after the ban, behind only the US. Law enforcement forces periodically raid such illegal mining installations.
China is the world leader in “central bank digital currencies,” also known as CBDCs, but the public is said to oppose CBDCs for fear of surveillance and control.
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