China has taken further steps to regulate cryptocurrency by introducing stricter foreign exchange rules.
According to the South China Morning Post, the rules require banks in the country to identify and report risky transactions.
These include activities tied to cross-border gambling, illegal international financial operations, and underground banking networks involving crypto assets.
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Under these measures, financial institutions must closely monitor who is involved in transactions, where their money comes from, and how often they trade.
In 2019, China banned cryptocurrency transactions due to concerns about energy consumption from mining and the need to cut greenhouse gas emissions. The ban stopped financial institutions from engaging in crypto trading and mining activities.
Interestingly, China still ranks second globally in Bitcoin
A lawyer at ZhiHeng law firm, Liu Zhengyao, noted that the new foreign exchange regulations provide additional grounds for penalizing crypto transactions.
Zhengyao explained that using China’s currency to buy digital assets and converting them into foreign currencies could be classified as cross-border activity. This would leave little room to bypass these rules using cryptocurrency.
In December 2024, Hong Kong also proposed rules for stablecoins, known as the Stablecoins Bill. What do the rules say? Read the full story.
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