Crypto ‘not protected by law,’ rules provincial high court in China

August 23, 2021 Coin Telegraph

China

A provincial high court ruling in China has set a potential precedent by declining to protect a plaintiff’s $10,000 worth of lost crypto tokens.

Yet another blow has been dealt to China’s cryptocurrency community, with news of a new high court ruling in the Shandong province that has drawn out the consequences of crypto’s lack of legal status in the country.

As the South China Morning Post (SCMP) reported, the case in question was an appeal against a ruling this January by an intermediate court in the city of Jinan. The plaintiff in the case had lost 70,000 yuan (roughly $10,750) by investing in unnamed crypto tokens back in 2017, which friends of his had reportedly endorsed. Following the People’s Bank of China’s doubling down on its anti-crypto measures in 2018, the involved accounts were closed, leading to the loss of the tokens.

Shandong’s high court has now ruled this weekend against the plaintiff's case, which rested upon allegations of fraud, by affirming that “investing or trading cryptocurrency isn’t protected by law.”

As previously reported, Shandong’s ruling is in line with the judgment of some other provincial courts in China, as, for example, when a court in the Fujian province dismissed a Bitcoin-related case last year on the grounds that a digital commodity cannot be protected by Chinese law.

Yet a ruling that very same year had suggested otherwise when the Shanghai No. 1 Intermediate People’s Court ruled that a couple should be compensated for the theft of their Bitcoin. This echoed a 2019 ruling by the Hangzhou Internet Court, which became at the time the second Chinese court to have deemed Bitcoin (BTC) to be virtual property.

The SCMP’s claim that this weekend’s ruling could serve as a negative precedent for crypto users in China comes as Beijing escalates its antagonistic stance toward cryptocurrencies, especially as of spring 2021.

People’s Bank of China in Shenzhen ‘cleans up’ illegal crypto firms

August 18, 2021 Coin Telegraph

China

The Shenzhen branch of the People's Bank of China launched a special “rectification” program against illegal crypto-related activities, beginning with a crackdown on 11 emerging companies.

The Shenzhen branch of the People’s Bank of China is taking a hardline approach to cryptocurrency-related activities deemed illegal. According to a report from state-run Shanghai Securities News yesterday, the branch has recently “cleaned up and rectified” 11 new companies suspected of engaging in illicit crypto trading.

The report did not disclose the companies’ names nor the details of how they were sanctioned. The action against crypto firms was carried out alongside a slew of wider-ranging measures against illicit cross-border trading of foreign currencies and stocks, with one target reportedly “a well-known domestic financial website that is suspected of publicizing illegal foreign exchange deposit transactions.”

In its summary of the branch’s agenda, Shanghai Securities News also noted that, parallel to its actions against firms in violation of the law, PBoC Shenzhen plans to:

“Carry out a pilot project of ‘precision education’ for financial consumers, use technology to enable accurate portraits of customers, and establish personalized risk prevention and education programs.”

Shenzhen authorities have consistently taken a stringent approach to the cryptocurrency sector, in line with Beijing’s increasingly toughened stance over the years. Although owning crypto has never been banned outright, the Chinese state has gradually ratcheted up restrictions on the industry since 2017. Over the past year, measures targeting crypto mining and trading have intensified, the former in part due to Beijing’s decarbonization commitments.

While decentralized cryptocurrencies are likely to remain subject to municipal and regional crackdowns for the foreseeable future, since 2020, Shenzhen’s government has been cooperating with the PBoC on promotional rollouts of China’s central bank digital currency and, as of last month, the city’s residents can already use the digital yuan on buses and subways and use it to top up their travel cards.

People’s Bank of China Targets Crypto Companies in Shenzhen Crackdown

August 18, 2021 Bitcoin.com

Digital Yuan to Promote International Use of Chinese Currency, Experts Say

July 30, 2021 Bitcoin.com

Countries representing over 90% of global GDP are exploring CBDCs

July 25, 2021 Coin Telegraph

CBDC

Governments around the world are pouring more resources into CBDC research and exploratory use cases. Among the major economies, China appears to be pulling ahead and has plans to implement digital-yuan usage during the 2022 Winter Olympics in Beijing.

The quest to understand the opportunities and challenges of a central bank digital currency, or CBDC, is underway in 81 countries, with five nations fully implementing a digital version of their currency, according to a new tracker from the Atlantic Council.

The Caribbean region is home to all five CBDCs that are currently in use, with The Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia and Grenada all implementing their digital cash systems.

CBDCs are in their pilot stage in 14 other countries, including South Korea and Sweden, the tracker shows.

Established in 1961, the Atlantic Council describes itself as a nonpartisan organization that seeks to promote U.S. leadership on various world issues. The CBDC tracker, which was unveiled July 22, currently monitors 83 countries and currency unions.

Among the countries with the four largest central banks — United States Federal Reserve, European Central Bank, Bank of Japan and Bank of England — the U.S. is furthest behind in terms of CBDC development.

The Federal Reserve has been researching CBDCs for several years now, with Chairman Jerome Powell indicating in January that digital-dollar development is a “very high priority” to combat financial crime. Meanwhile, New York Fed Bank President John Williams believes that the emergence of cryptocurrencies raises challenging questions for central banks.

China recently indicated that foreign visitors will be allowed to use the digital yuan during the 2022 Winter Olympics — provided they share their passport information with the central bank. A group of U.S. senators that includes Bitcoin proponent (BTC) Cynthia Lummis has urged American Olympians to boycott the digital yuan. According to the South China Morning Post, Beijing responded by telling the U.S. senators to “stop making trouble.”

The People’s Bank of China claims that nearly 21 million people have already opened a virtual wallet for the purpose of using the digital yuan.

Digital yuan pilots expand to insurance industry for the first time

July 21, 2021 Coin Telegraph

CBDC

China's central bank digital currency can now be used on insurance policies that offer various levels of compensation for diagnosis of or death due to COVID-19.

China's nascent central bank digital currency, the digital yuan, has already been deployed for an extensive array of successful pilot schemes, ranging from e-commerce to salary payments and to festive traditional lotteries.

This week has reportedly seen the currency debut in the insurance industry, in the city of Shenzhen, where it is being piloted by the local branch of the People’s Bank of China together with a local subsidiary of China’s leading insurer, Ping An.

The project involves a new insurance policy tailored to medical workers in Shenzhen’s Nanshan district, offering them various levels of compensation for diagnosis of or death due to COVID-19.

Workers are being incentivized to use the digital yuan wallet to make their insurance premium payments by being offered the prospect of preferential allowance, according to the report.

Wang Peng — an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China — has said that the pilot is significant as it extends the use of the digital yuan well beyond e-commerce and retail payments and can demonstrate its feasibility in a much wider range of more complex application scenarios. Peng told local reporters:

“As more users get used to making payments with the digital yuan and the market matures, the application scenarios will be able to expand from the insurance industry to more scenarios such as financial services, life services, and even the purchase of funds and trading in securities."

Ping An will reportedly further explore the integration of the digital yuan for insurance claims, payments and other scenarios in the insurance sector.

This week has notably seen the digital yuan enter the fray of geopolitical tensions between China and the United States, following several senators’ submission of a letter requesting that officials from the U.S. Olympic and Paralympic Committee board prevent U.S. athletes from using or accepting the Chinese digital currency.

In response, Chinese Foreign Ministry spokesperson Zhao Lijian has called for a lowering of tensions, appealing to senators to “stop making sports a political matter and stop making troubles out of the digital currency in China.”

China’s central bank worried about stablecoins’ risk to financial systems

July 8, 2021 Coin Telegraph

Alibaba

While Visa and other major private payments networks see the potential of stablecoins, China's central bank believes they pose serious risks to global financial systems.

The Chinese central bank is “quite worried” about the global financial risks associated with digital currencies, particularly stablecoins, according to a senior official.

Fan Yifei, a deputy governor of the People’s Bank of China (PBoC), expressed concerns over the reportedly serious threat stablecoins like Tether (USDT) pose to global financial and settlement systems, CNBC reported Thursday.

The official emphasized that the speed of development in private payment systems is “very alarming,” and the PBoC is working against monopolies and the “disorderly expansion of capital,” adding:

“Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system.”

Fan noted that the Chinese government has already taken some measures to limit the expansion of global stablecoins in the country. The deputy governor stressed that the PBoC will apply the same restrictive measures that it took on Alibaba’s Ant Group to other entities in the payment services market.

As previously reported, the Chinese state halted Ant’s $37 billion IPO last November, also launching an antitrust probe into Alibaba. Mu Changchun, head of digital currency research at the PBoC, later said that China’s central bank digital currency is designed to provide backup for major retail payment services like AliPay and WeChat Pay as its key objective. According to Fan, China’s invite-only digital yuan system has amassed more than 10 million users so far.

Apart from cautioning against stablecoins, Fan also criticized major cryptocurrencies like Bitcoin (BTC), stating that such digital currencies have “become speculation tools” and pose potential threats to “financial security and social stability.”

China has taken a tough stance on the cryptocurrency industry, recently renewing its crackdown on crypto mining activity as well as cryptocurrency trading.

Meanwhile, some of the world’s biggest payment companies like Visa have doubled down on their positive stance on stablecoins. “Stablecoins are on track to become an important part of the broader digital transformation of financial services, and Visa is excited to help shape and support that development,” the company wrote in its official crypto update on Wednesday.

Beijing subway now accepts digital yuan

June 30, 2021 Coin Telegraph

CBDC

Beijing's rail transit service now accepts digital yuan for subway rides through an integration with the Industrial and Commercial Bank of China.

China continues expanding the scope of its central bank digital currency (CBDC) by debuting digital yuan payments for transport services.

According to an official Wednesday announcement, the Beijing subway has launched a pilot program enabling passengers to access 24 subway lines and four suburban railway stations using the digital yuan, also known as e-CNY.

The new service is only available for customers witb a bank account at the Industrial and Commercial Bank of China, a major bank involved in China’s CBDC tests. “You need to download a mobile app that is linked with your bank account to access the service,” a spokesperson for the Beijing rail transit network reportedly said.

The announcement notes that Beijing rail transit service providers will continue promoting diverse applications of the digital yuan in order to optimize the “new digital travel experience.”

The news comes shortly after Suzhou, a city in East China’s Jiangsu province, launched a similar digital yuan integration on Tuesday. According to a report by Sina Finance, Suzhou was the first city in China to start accepting e-CNY payments for subway rides.

Beijing has become a major spot for China’s digital yuan trials, housing a wide number of e-CNY integrations and related initiatives.

As of mid-June, Beijing hosted more than 3,000 digital yuan-enabled ATMs, allowing the public to deposit and withdraw the digital currency. Previously, the Beijing Local Financial Supervision and Administration announced an initiative to distribute $6.2 million in digital yuan to Beijing residents.

Banks fall in line as China’s central bank cracks down on crypto accounts

June 21, 2021 Coin Telegraph

Alipay

AgBank — the world's third-largest bank by assets — has indicated it will follow the PBoC's cue and work to stamp out its clients' crypto-related activities.

The Agriculture Bank of China (AgBank) — the world's third-largest bank by assets — is set to implement Beijing's firm anti-cryptocurrency measures and rigorously vet its clients to ensure they are not engaged in any form of illegal activities involving crypto transacting, trading or mining.

Agbank's statement today followed the institution's meeting with the People's Bank of China (PBoC), which convened major domestic banks and mobile payment service providers and ordered them to ensure that banking and settlement services are denied to clients engaged in crypto-related transactions. An official PBoC statement today reiterated that all banks and payment institutions “must not provide account opening or registration for [virtual currency]-related activities.” It outlined:

“Institutions must comprehensively investigate and identify virtual currency exchanges and over-the-counter dealers’ capital accounts, and cut off transaction funds payment links in a timely manner; they must analyze the capital transaction characteristics of virtual currency trading hype activities [...] and ensure that relevant monitoring and handling measures are implemented.”

In addition to AgBank, the Industrial and Commercial Bank of China, the Construction Bank of China, Postal Savings Bank of China and the Industrial Bank, alongside mobile payments app AliPay, were all present at the PBoC meeting.

AgBank's statement is the first made by a Chinese state bank in line with the tenor of this year's renewed suite of anti-crypto measures, which have included the State Council’s Financial Stability and Development Committee decision in late May to curtail Bitcoin (BTC) mining amid financial risk concerns.

Regional financial regulators in China have also upped their game and issued warnings against illegal crypto- and blockchain-focused financing platforms or advertising campaigns, as well as banning financial and payment institutions from “directly or indirectly [providing] services related to virtual currencies.”

Agbank has indicated that it will immediately shut accounts and suspend ties with any clients found to be involved in cryptocurrency trading. The megabank initially appealed to its clients to report any suspected crypto-related frauds, although this request has reportedly since been deleted from the bank's statement.

Having banned token issuance and crypto trading as early as 2017, during the market's first major bull run, this year has seen a consolidation of Beijing's antagonistic stance towards decentralized cryptocurrencies. In mid-May, three major Chinese trade associations — The China Internet Finance Association, China Banking Association and China Payment and Clearing Association — issued a joint statement warning the public about the risks of investing in cryptocurrencies.

Beijing's major crackdown on crypto mining has cited concerns over the industry’s carbon footprint, especially in areas such as Inner Mongolia. At least three mining firms — BTC.TOP, Huobi and HashCow — have been driven to cease their activities on the mainland. Social media networks and internet companies in the country have also fallen into line with the center's anti-crypto stance and have, over the last few months, censored crypto-related search results and banned crypto-related profiles.

Over 3,000 ATMs in Beijing can now convert digital yuan into cash

June 18, 2021 Coin Telegraph

ATM

The Agricultural Bank of China previously debuted digital yuan ATMs this January.

China continues apace with the adoption of its central bank digital currency (CBDC) as major banks launch a significant batch of digital yuan-powered ATMs.

The digital yuan — a CBDC controlled by The People’s Bank of China — is now available for deposit and withdrawals at over 3,000 ATMs across Beijing, state-run Xinhua news agency reported Friday.

According to the report, the Beijing branch of the Industrial and Commercial Bank of China has become the first bank to fully enable the digital yuan exchange in the Chinese capital city by setting up more than 3,000 digital currency-compatible ATMs.

The Agricultural Bank of China (ABC), another major bank involved in China’s CBDC tests, has also deployed more than 10 ATMs in the Wangfujing area, a major shopping street in Beijing. As previously reported, the state-owned bank debuted digital yuan ATMs this January, enabling customers at select branches within the Shenzhen region to deposit and withdraw the digital currency.

The ABC has been actively involved in developing a wallet for the digital currency.

The Chinese government has been actively promoting the digital yuan in the capital through a digital currency lottery as part of ongoing digital yuan pilots. The state intends to distribute 40 million digital yuan ($6.2 million) to Beijing residents in a “red envelope” campaign, allowing participants to spend digital currency prizes by June 20.

Peoples Bank of China