The drop in domestic currency in China, i.e., Yuan, has drawn the attention of Chaoyang District to ban any events that are related to crypto. The district is keen to protect the status of the country’s fiat currency so that it could protect the property of the people and the status of being the legal tender. However, the ban is restricted to the district only that is home to approximately 3.6 million and increasing business district due to skyscrapers.
Financial System Stability
The district notice indicated that it has left with no alternative but to defend against risks coming from money laundering apart from maintaining financial system stability. Therefore, it has directed hotels, restaurants, shopping malls, offices, and any other places to desist from undertaking any kind of promotional activities towards digital currency, trustnodoes.com reported. This meant that even the media like WeChat, a unit of Tencent, came under the scanner of the authorities. The authorities were also under pressure since the money is losing its value.
The district notice said further that “We have monitored risks in the internet finance and cryptocurrency space over the past days. A crypto asset management platform named Bit-up recently held an illegal activity to promote its crypto products in the district, which triggered local regulator’s attention.” Incidentally, BitUP seems to be a crypto index fund that is much similar to that of a traditional index fund focused towards equity shares. However, the district believes that the index funds invest in a start-up that has “professional investors from Wall Street and Silicon Valley.”
The actions appear to have angered the bureaucrats, and that resulted in WeChat banning from their platform several crypto media. They have justified their actions by stating that initial coin offerings (ICOs) are not legal in China. Another report suggested that the action was the aftermath of the regulations initiated early this month. The new regulations hold internet entities as responsible for enforcing them. Tencent reacted to say that it closed these accounts permanently.
The Chinese firm disclosed that it suspected them of carrying information that was associated with ICOs apart from speculations of trading in digital currencies. As a result, several crypto accounts have to face the banned music that included Jinse Caijing, which is enjoying daily readership of 350,000. It seems that Jinse has not reported about the censorship though they carried an article about censoring of crypto events.
Plunge In Yuan
The latest developments comes after the local currency plunging about 6 percent against the American Greenback as the devaluation is nearing the sensitive level. The authorities were also under pressure from several quarters. For instance, they have to tackle the issue of a trade war with the United States that is leading towards a weak economy in the country.
Trump is not happy with the intellectual property theft in China that is rampant and without any checks. The American president also views the Chinese actions as cheating with the monetary devaluation and wants to open the protectionist market. However, multinational firms such as Google are not ready to leave the market and keen to work with them.