China Tightens Cryptocurrency Regulations with New Banking Rules
China’s foreign exchange regulator has introduced stringent measures requiring banks to flag and monitor high-risk trading activities, including transactions involving cryptocurrencies. These rules are expected to make it increasingly challenging for mainland investors to trade in digital assets such as Bitcoin.
According to the State Administration of Foreign Exchange, banks must identify and report “risky foreign exchange trading behaviors.” These include activities linked to underground banking, cross-border gambling, and illegal cross-border financial transactions involving cryptocurrencies.
The regulations mandate that local banks across mainland China monitor such activities based on specific criteria, such as the identity of the individuals and institutions involved, the source of funds, and trading frequency.
Additionally, banks are required to implement robust risk-control measures targeting flagged entities. These measures may include restricting or denying certain financial services to individuals or institutions engaged in high-risk behaviors.
This policy underscores Beijing’s ongoing effort to crack down on cryptocurrency-related activities like Bitcoin trading and mining, which the government views as threats to the country’s financial stability. The move aligns with China’s broader strategy to maintain stringent control over its financial system and curb unauthorized digital asset transactions.
