Three self-regulatory organizations reiterate China’s 2017 stance on crypto amid market volatility

Three Chinese self-regulatory organizations have published a statement to reiterate the country's stance on crypto businesses.

The National Internet Finance Association of China (NIFA), the China Banking Association (CBA) and the Payment and Clearing Association of China (PCAC) jointly issued a note on Tuesday night China time, telling their member financial and payment institutions not to engage in or provide services to crypto-related businesses.

The three industry bodies are all self-regulatory organizations under the supervision of several Chinese ministries including the People's Bank of China (PBoC) and the China Securities Regulatory Commission. The SROs themselves are not regulatory agencies but are responsible for ensuring their member institutions to follow the regulatory direction of their superior government entities. 

"Financial and payment member institutions shall not provide insurance services that relate to virtual currencies or directly and indirectly offer crypto-related services for their clients, including but not exclusive to: crypto-related trading, custody, lending and settlement; accepting virtual currencies as a payment tool; exchanging virtual currencies with the Renminbi," the statement read.

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The statement also directed member internet technology companies not to offer any advertising or promotion services for crypto-related businesses.

The statement was issued under the context of "continuing the execution of the PBoC's notices on preventing the risks of bitcoin and initial coin offerings," which were announced as a notable policy change in China towards the crypto space in 2017.

The 2017 notice prohibited any type of initial coin offering activities and banned Chinese crypto exchanges from offering centralized fiat-to-crypto order books. Since then, Chinese financial institutions have already suspended providing banking services for crypto exchanges as their fiat on- and off-ramp channels. 

In fact, the 2017 ban already had the same requirement where the PBoC said financial institutions and non-banking payment organizations shall not directly or indirectly provide trading, settlement or insurance services for virtual currency businesses or crypto-based fundraising activities.

The Tuesday statement reiterated China's stance towards crypto trading-related activities inside the country amid the recent market volatility, which the SROs deemed as "severely damaging the safety of people's property and disrupting financial stability."

About Author

Wolfie joined The Block’s news team in 2020 and switched to the research side in 2021 to focus on crypto mining analysis. Prior to The Block, he had been a journalist at CoinDesk for three years. Wolfie has a background in financial journalism.