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China moves to block online payments for cryptocurrency on overseas exchanges
China is tightening regulations on cryptocurrency. According to local media reports, the National Internet Finance Association of China will regulate 124 cryptocurrency trading platforms whose servers are all overseas, inspect and shut down domestic initial coin offering or trading platforms, WeChat accounts, and limit their access to payment.
Pan Gongsheng, deputy governor of the People’s Bank of China said that after China’s crackdown on cryptocurrency and ICO, some of the domestic institutions simply moved their business abroad and kept providing services to Chinese residents, which is illegal and already been banned.
Apart from monitoring overseas service providers, China’s regulatory parties also seek to conduct further investigations against platforms. The recent shut-down of some blockchain WeChat official accounts is part of the process. According to Tencent, these were releasing information on cryptocurrency trading or trying to launch their own ICO via WeChat payment system.
After shutting down several cryptocurrency-related WeChat official accounts, Tencent also told local media that it has cleaned up all the cryptocurrency-related business accounts by limiting the access and amount of money these accounts can have. According to Tencent, it has stayed alert to various kinds of initial coin offering (ICO) since the People’s Bank of China and other regulatory agencies made an announcement against ICO last September.
The Association clarified again, after the first statement in 2013, that third-party payment service providers, such as Tencent and Alipay, shouldn’t provide any services related to Bitcoin or any other cryptocurrencies. In reality, however, this option is still available on trading sites such as huobi.com.
Zhao Yao, a researcher at Beijing-based Research Center of Payment & Settlement, said this is mainly due to technical issues as it’s difficult to tell whether a transaction is buying the currencies.
Tencent said that they will monitor more closely the transactions and detect whether they are for cryptocurrencies. Once confirmed, they may directly block the transaction. Ant Financial issued a similar announcement.
Jing Dongxian, CEO of Ant Financial said earlier in public that although Ant Financial owned the world’s most blockchain patent, none of them is related to ICO, which is smilier to the attitude of the Chinese government.
The Ministry of Industry and Information Technology of China issued the country’s first blockchain white paper in May, acknowledging the new tech’s innovation and the possible positive influence on China’s economy.