Global Efforts to Regulate Cryptocurrencies
The People's Bank of China (PBOC) emphasized international efforts to regulate digital assets in its 2024 annual financial stability report. Released on December 27, the report notes that 51 jurisdictions worldwide have implemented bans or restrictions on cryptocurrencies. Some countries, like Switzerland and the United Kingdom, have amended existing laws, while others, such as the European Union, introduced new legislative frameworks like the MiCAR regulation for crypto asset markets.

China’s Strict Approach to Digital Assets

Cryptocurrency Ban in Mainland China
In September 2021, the PBOC, along with nine other Chinese regulators, issued a notice that effectively banned cryptocurrency trading in the country. Document No. 237 declared that digital assets are not legal tender in China and that any transactions involving them are illegal. Entities or individuals participating in these activities face administrative and criminal penalties.

The ban also prohibited providing online services to Chinese residents via foreign platforms for cryptocurrency trading, deeming it unlawful.

Hong Kong: A Different Approach to Digital Assets

Legalized Trading and Licensing for Crypto Platforms
Unlike mainland China’s stringent policies, Hong Kong has legalized the trading of digital assets. In June 2023, Hong Kong introduced a licensing regime for digital assets, allowing licensed platforms to offer retail trading services.

In August 2024, Hong Kong’s Legislative Council doubled down on its intention to establish the region as a crypto hub. According to council member David Chiu, the government plans to implement new regulations for digital assets, including stablecoins, over the next 18 months. Preparations included Sandbox tests to determine the best approach for upcoming legislation.

Involvement of Major Financial Institutions
The Hong Kong report states that large financial institutions, such as HSBC and Standard Chartered Bank, are required to integrate digital asset transactions into their routine customer oversight practices.

International Efforts in Regulating Digital Assets

China’s Role in the Global Regulatory Framework
The PBOC stated that it is working to improve the international regulatory framework for digital assets, as recommended by the Financial Stability Board (FSB). This international body, which monitors and issues recommendations for the global financial system, published its framework for regulating crypto asset activities in July 2023.

“While the connection between cryptocurrencies and systemically important financial institutions or markets is limited, cryptocurrencies may pose risks in economies where their use in payments and retail investments is increasing,” the PBOC warned.

Summary

The People’s Bank of China highlighted the varied approaches to cryptocurrency regulation worldwide in its report. While mainland China adopts a strict stance with a complete ban, Hong Kong positions itself as a hub for digital assets by supporting legal trading and introducing new regulations. On the global stage, China is contributing to international efforts to create a stable and secure regulatory environment for cryptocurrencies.

#DigitalAssets , #CryptoRegulation , #blockchain , #CryptoNewss , #CryptoMarkets



Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!

Notice:

,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“