The Federal Reserve Bank and its regional outposts manage the United States’ monetary policy. China’s equivalent is the People’s Bank of China (PBC), and it’s declared that cryptocurrencies are “not protected by law.” The pronouncement is one in a long line of regulatory crypto moves made by governments around the globe in recent months.
Crypto Rising = Crypto Regulations
Cryptocurrencies are proliferating, and governments are growing concerned about the disruptive potential of decentralized digital currencies. Consequently, politicians are rushing to pass anti-crypto policies, and some countries have banned them altogether. In other nations, like the United States, a patchwork of crypto regulations is emerging that could lead to legal confusion.
Recent Cryptocurrency Crackdowns in China
Recently, one of the PBCs regional branches in Shenzhen “rectified” (shut down) 11 issuers of crypto for “illegal virtual currency activities.”
Additionally, Chinese courts are coming down hard on digital currencies. Various provincial benches have held that privately issued cryptos are “not protected,” and the high court in Shandong recently ruled that certain private digital currencies are illegal. Moreover, the government in Beijing has been escalating its antagonism toward private tokens.
Is the Chinese Government Clearing the Way for Its Own Crypto?
The recent crypto crackdowns in China coincide with the PBC’s much-publicized initiative to issue its own digital yuan, called the “Digital Currency Electronic Payment” — or DCEP, in the hope of replacing some of the cash in circulation.
At the time of this writing, three of China’s provinces are about to conduct DCEP trials. The plan is to issue millions of dollars in DCEP to commercial banks. In turn, the commercial banks will distribute the DCEP by lottery to the public in exchange for cash. Concurrently, participating e-commerce firms are allowing customers to make purchases with DCEP.
China’s digital currency plan is making other countries a bit nervous, especially the United States. After all, if China’s plan works, it could replace the dollar with the digital yuan, thereby decreasing the dollar’s value worldwide.
Connect With an International Cryptocurrency Lawyer
Need legal assistance with an international cryptocurrency matter? The Kelly Law Firm has helped many businesses and individuals with various blockchain and digital currency issues, from smart contract auditing to cross-border registration issues. We also handle cryptocurrency litigation.
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