- A crypto ban in China is now in place post-Digitual Yuan launch.
- Individual traders and sellers are now banned from selling Digital Yuan backed cryptocurrencies.
- China finally commences formal regulation on cryptocurrencies.
An official crypto ban in China is now finally underway as the latest government draft clearly prohibits individuals and units to sell cryptocurrency in order to curb the Digital Yuan circulation.
The draft proposes strict punishments against the violators. The People’s Bank of China is directed to not only “halt and forfeit” any Digital Yuan backed cryptocurrencies but also issue a fine that could be up to five times the amount of such a venture.
Rationale behind crypto ban in China
China recently ran a pilot project to test the use case, adaptability, and the reach of the Digital Yuan within the country. The pilot was run in a few cities including Shenzen and became a great success within the country.
While on the other hand, President Xi is also very vocal about the country’s blockchain priorities in the post-COVID-19 economic landscape. Now a legal draft proposes a ban on all Digital Yuan-backed altcoins and stable coins in order to ensure proper circulation and adoption.
The ban does not affect other cryptocurrencies such as Bitcoin, Ethereum and Litecoin, etc. However, a ban on crypto trading is already been in effect within China since 2017.
It appears that the latest legislative draft is put forth to ensure the full-throttle success of the Digital Yuan, while the economic arch-enemy the United States is busy in elections. China plans to disseminate the Digital Yuan central bank digital currency through various banks. Although the United States is also planning to launch a Digital Dollar, so far China is leading the arena by a great margin.