China: Central Bank bans companies from offering bitcoin-related services

The Chinese Central Bank and the Beijing Municipal Office of Local Financial Supervision ordered the closure of the software maker Beijing Qudao Cultural Development Co Ltd for allegedly providing software services for cryptocurrency transactions, for which the cessation of business operations was ordered. and closing the website.

Likewise, the Beijing Financial Conduct Authority and the Department of Business Administration of the People's Bank of China indicated that companies cannot offer advertising services to companies that are related to cryptocurrencies, which includes the provision of commercial premises, exhibition commercial, marketing, among others.

According to Criptonoticias, said information was published by the Central Bank of China in a statement in which, in turn, it indicates that the authorities aim to prevent and control the risk of speculation in virtual currency transactions, as well as to protect the property of the people, a situation that led to the decision to close related companies.

In turn, the authority indicated that consumers must establish a correct investment philosophy and be aware of risk, for which they requested that they avoid participating in virtual currency trading speculation activities in order to avoid falling into the illegal use and disclosure of personal information. Likewise, they indicated that the timely report of virtual currency transactions related to illegal situations must be reported to the public security organs.

However, it has not been clear if the company offers the aforementioned services, since the journalist specialized in Blockchain, Colin Wu, indicated that this company used to dedicate itself to the entertainment industry, with its own virtual currency called "Mao Li Coin" .

The described restriction by the Chinese Central Bank is due to a series of measures that have been taken long ago with respect to bitcoin. Indeed, in May of this year, the prohibition of cryptocurrency trading was announced and the law regulating the prohibition of cryptocurrency mining was promulgated. Likewise, it was announced that the accounts of users who trade in cryptocurrencies or are suspected of it would be closed.

On the other hand, the Chinese government also prohibited banks from processing cryptocurrency transactions, as well as preventing the risks of the use of Bitcoin, a measure that, as we mentioned, obey the policy of repressing bitcoin mining in the country.

These restrictions appear to be due to the fact that China does not want competitors for its virtual currency, the digital yuan, which was implemented in 2020 and is growing.

In this sense, China, unlike El Salvador, seeks to restrict bitcoin to improve its economy, while the Central American country advocates granting it the status of national circulation currency, in order to attract new investors and increase the development of the economy. industry of the country.

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Andrea Norabuena
Lawyer from the Pontifical Catholic University of Peru with a Specialization in Consumer Protection from the same House of Studies. Member of the Lima Bar Association. He has experience in consumer protection, intellectual property and competition law. His career includes INDECOPI, law firms and companies. Currently, she is an independent consultant.

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