China’s foreign exchange regulator has adopted new rules requiring banks to monitor and flag risky transactions involving cryptocurrencies.
The rules make it harder to buy digital assets, while requiring banks to monitor transactions involving cross-border illicit financial activity and report on the identities, sources of funds, and transaction frequency of individuals and organizations.
China continues its “aggressive” anti-crypto stance
Liu Zhengyao, a lawyer at ZhiHeng, said China’s new regulations would create a basis for punishing cryptocurrency trading and could lead to tighter regulation. Using yuan to buy cryptocurrency could be considered cross-border activity.
China banned cryptocurrency trading in 2019, aiming to reduce energy costs and emissions, and prohibited financial institutions from trading or mining cryptocurrencies.
China Holds $18 Billion Worth of Bitcoin
Despite China’s anti-crypto stance, the country still ranks second in Bitcoin holdings, with 194,000 $BTC worth around $18 billion.
China does not buy Bitcoin directly, but rather obtains it through the seizure of assets linked to illegal activities.
Former Binance CEO Changpeng “CZ” Zhao said China could adopt a Bitcoin reserve strategy, stressing that the country could act quickly if it wanted to. Zhao said the government would need to do this at some point.
