Report: Chinese Payments Association moves to block all bitcoin activity from banking sector

Home » Report: Chinese Payments Association moves to block all bitcoin activity from banking sector

bitcoin-wallEarlier this year, the People’s Bank of China did almost everything within its power to discourage large-scale trading in bitcoin. When threats and warnings didn’t work, it forbade bitcoin companies from using the country’s payment system. Exchanges soon found ways around this, working with third-party processors to obscure payments. When bitcoin prices and trading again surged, the PBoC began to pressure banks to close the accounts of bitcoin-related businesses. While this has had a significant chilling effect on bitcoin trading in the country, by some estimates Chinese trade still accounts for as much as 10% of the global total.

With few arrows left in their quiver other than an outright ban and the creation of a digital black market, Chinese regulators appear to be putting pressure on the only remaining payment stream: Third party payment systems.

According to Chinese financial news agency Caixin, a leaked report from the Payments and Clearing Association of China (PCAC) states that a crackdown on voucher-based payment system is in the works. As a non-profit, semi-governmental regulatory body, the PCoC has limited authority than the PBoC, but it is able to make recommendations for enforcement techniques.

According to the PCoC statement, banks are encouraged to periodically search account names and comments sections in money transfers for clues about bitcoin exchange deposits. The most likely use of this technique would be to create a blacklist for customers associated with bitcoin activity, effectively barring those who use bitcoin from the banking system itself. The statement dates back to late May, meaning these policies may already be in active use by regulators.

The Caixin report has had a negligible effect on bitcoin prices in China, perhaps owing to the common knowledge that the country’s regulators and central bank are already openly hostile to cryptocurrency.

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