China has further complicated its relationship with blockchain, offsetting recent positivity toward the technology with a new regulatory warning.
Reported by Forbes, Chinese regulators including the Beijing Securities Regulatory Bureau have issued a warning concerning an increase in cryptocurrency trading in the nation.
The joint regulatory warning was issued on December 27th, 2019 by the Beijing Securities Regulatory Bureau, Beijing Local Financial Supervision Bureau, the People’s Bank of China’s Business Management Department, and the Beijing Banking and Insurance Regulatory Bureau. It focused on how virtual currency trading has recently been on an uptick in China.
Regulators warned that trading platforms for cryptocurrencies and digital money are creating potential threats for investors.
It specifically pointed to “zero-interest loans, dual currency financial management and other projects through digital currency mortgages” and clearly states that the regulators “seriously warn institutions and personnel in Beijing that carry out related activities”.
The call for caution further complicates China’s already complex approach toward blockchain technology and virtual currencies. In October of last year, Chinese President Xi Jinping released a statement urging firms in the country to “seize the opportunity” of blockchain.
It was noted by the Forbes article, however, that the statement and recent warning could be reconciled considering the country is poised to introduce its own Central Bank Digital Currency.
The virtual money would allow China to embrace blockchain technology while necessitating that it block out competition to enhance its control of the realm.
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