China prohibits units and individuals from creating and selling cryptocurrencies

Marco Green
October 26, 2020

"The People's Bank of China has actively promoted the revision of the "People's Bank of China Law of the People's Republic of China" and drafted the "People's Bank of China Law of the People's Republic of China (Revision Draft for Solicitation of Comments)", which is now open for public consultation opinion". Since then, authorities in the country continue to place restrictions on cryptocurrency commerce.

Mu Changchun, the head of the People's Bank of China's digital currency research institute, said that the central bank-backed digital yuan will be compatible with major mobile payment wallets like WeChat Pay and Alipay.

Article 22 clarifies that no unit or individual may produce or sell tokens, coupons and digital tokens to replace renminbi in circulation in the market, which would be used as renminbi substitutions circulating in the market.

The draft also stipulates that the renminbi, the official currency of China whose basic unit is yuan, includes both physical and digital forms.

Any violation of Article 22 shall result in the confiscation of all profits, the destruction of all tokens and the imposition of a fine of less than five times the illegal amount, according to Article 65. If passed, issuers of such digital assets will have to halt their activities and forfeit all earnings from such crypto sales.

By prohibiting the issuance and sale of tokens that could compete with the digital yuan, it appears the PBOC is gearing up for the release of its central bank digital currency.

Other reports by Click Lancashire

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