Centralized cryptocurrency trade should be banned to avoid risks, says PBC official

A senior Chinese central banker has said authorities should ban centralized trading of virtual currencies as well as individuals and businesses that provide related services, an internal memo from a government meeting seen by Reuters showed.

In the memo outlining details of discussions at a meeting of internet regulators and other policymakers last week, PBC Vice Governor Pan Gongsheng said the government will continue to apply pressure to the virtual currency trade and prevent the build-up of risks in that market.

National and local authorities should ban venues that provide centralized trading of virtual currencies, of which Bitcoin is the biggest, Pan said. They also need to ban individuals or institutions that provide market-making activities, guarantees or settlement services for centralized trading of the currencies, such as online “wallet” service providers.

Chinese regulators last year banned initial coin offerings, shut down local cryptocurrency trading exchanges and limited Bitcoin mining – but activity in the cryptocurrency and Bitcoin space has continued through alternative channels in China despite the crackdown.

“The financial work conference clearly called for limiting ‘innovations’ that deviate from the needs of the real economy and escape regulation,” Pan said, according to the memo, referring to last week’s meeting.

Authorities should also block related domestic and foreign websites, close mobile apps that provide centralized virtual currency trading services to Chinese users and sanction platforms that provide virtual currency payment services, Pan said.

Bloomberg reported on Monday that Chinese authorities plan to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading.