June 21, 2021
Following the decisions and arrangements of the State Council and the guidelines of the 51th plenary of the Financial Stability and Development Committee under the State Council, and aiming to crack down on the speculative trading of virtual currencies including Bitcoins, to safeguard the properties of the general public and to ensure financial security and stability, the People's Bank of China (PBC) had a regulatory talk with some banks and payment institutions, including the Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Postal Savings Bank of China, Industrial Bank, and the Alipay, on their services for the speculative trading of virtual currencies.
The PBC pointed out that the speculative trading of virtual currencies will disrupt the normal functioning of the economy and the financial market. It will give rise to risks of illegal and criminal activities such as illegal cross-border transfer of assets and money laundering, and seriously infringe the property safety of the public. Banks and payment institutions are to strictly follow regulatory requirements in the Notice on Guarding Against the Bitcoin Risks, the Announcement on Preventing Financing Risks Related to Token Offerings, etc. They are required to fulfill their obligations of client identification, and not to provide products or services regarding account opening, registration, transaction, clearing and settlement for related activities. They are required to screen accounts opened with them and identify those of virtual currency exchanges or over-the-counter (OTC) dealers, and cut off their payment channels for trading funds. They are to analyze the characteristics of funds for virtual currency speculation, mobilize more technological resources, improve their models for monitoring irregular transactions, and thus enhance their capacity of monitoring and identifying irregularities. In addition, banks and payment institutions are required to improve their internal systems, make clear assignment of tasks, and ensure that accountabilities are fulfilled and that monitoring-related negligence is treated effectively.
The attendees responded that they will attach great importance to the issue, and will not conduct or participate in virtual currency-related activities, as required by the PBC. They will make more screening and resolution efforts, and cut off fund channels for speculative trading of virtual currencies.