China’s tech hub says emphatic ‘no’ to cryptocurrency as Shenzhen’s central bank branch shows zero tolerance

Shenzhen was one of the key bases for China’s cryptocurrency investment community
Financial authorities in the city have carried out repeated campaigns to halt anything remotely connected to cryptocurrency

Bitcoin

Coco Fengin Beijing

Published: 2:05pm, 18 Aug, 2021

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The Shenzhen branch of the People’s Bank of China (PBOC), China’s central bank, has “cleansed” 11 companies for their involvement in suspected illegal cryptocurrency activities as part of a special campaign to show a zero-tolerance attitude to cryptocurrency trading, according to a report by state-run Shanghai Securities News on Tuesday.

The newspaper did not provide specifics on how these companies were dealt with.

Shenzhen, a global centre for computing hardware including cryptocurrency “mining” equipment, was one of the key bases for China’s digital token investment community.

The city’s financial authorities, however, have carried out repeated campaigns to halt anything remotely connected to cryptocurrency since digital tokens like bitcoin are seen as a threat to the country’s financial stability.

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In February 2021, Shenzhen shut down eight companies involved in activities such as distributing wealth management products backed by bitcoin, promoting digital tokens as investment vehicles, as well as introducing overseas cryptocurrency projects to domestic investors.

The Shenzhen branch of the PBOC has also clamped down on illegal cross-border trading of foreign currencies and stocks.

Shenzhen’s moves against cryptocurrency echo initiatives seen across the country in recent months after the State Council’s Financial Stability and Development Committee – chaired by Vice-Premier Liu He, the Chinese president’s top aide in economic and financial matters – announced in May a further crackdown on bitcoin mining and trading in the country to mitigate financial risks.

In July, the central bank and Beijing’s Local Financial Supervision and Administration issued a joint statement calling on companies to halt cryptocurrency-related businesses.

That same month, operators of the world’s top two cryptocurrency exchanges, Huobi and OKCoin, cancelled the business licence registration of their respective subsidiaries in Beijing.

Bishijie, an online community for Chinese cryptocurrency investors, also terminated the operation of its website and app in mainland China.

BTCChina, which once ran the country’s largest cryptocurrency exchange, said in June that it had “completely exited from bitcoin-related businesses” on the mainland.