Let me tell you the latest about the monetary restrictions imposed in China and its implication with cryptocurrencies.
China introduced a very restrictive program to control large money transactions, via cash or bank transaction, amid growing concerns about the stability of the financial system. In my opinion, bank defaults could be a trigger that would have an uncontrolled influence on the recovery of the economic giant.
El People's Bank of China (NBK) launched a pilot program this month in the province of Hebei in which bank clients must report the destination of large withdrawals of money, and even deposits in advance. The bank wants to know the destination and origin of all the funds. In October, the program, which looks set to last two years, will expand to Zhejiang, Shenzhen and reach more than 70 million people; a figure certainly not inconsiderable.
The pilot program aims to strengthen control over the «unreasonable or senseless demand for large amounts of cash» and the expenditure or consumption in cryptocurrencies, . In statements the NBK He said that in this way regulators will be able to better control systemic risks along with the flight of capital that they achieve with the use of Bitcoin and other cryptocurrencies.
The program implemented by the bank will require companies, self-employed professionals or even citizens of any tax type, to provide information about transactions that exceed the 500.000 yuan ($71.000 USD), while for investors or retirees this threshold will be between 100.000 and 300.000 yuan ($14.000 USD – $42.000 USD) depending on the region. Likewise, control over any type of exchange of cryptocurrencies authorized in some provinces of China will be strict.
The People's Bank of China (NBK) statement does not specify that banks must or can reject a transaction if it exceeds these amounts, but I am sure that they will do so if the previously required information requirements are not met. On the other hand, lenders and non-banking financial companies must take into account the risks and control clients classified as high risk, having to identify the destination a priori. At the same time, regulators are asking banks to give up profits on their bottom line and provide cheap loans to help the country's economy, and here I use the phrase “We have come up against the Banks”.
Finally, to finish this opinion article, I would like to tell you that a recent study carried out by Sino Capital says that the Chinese market made a great contribution to the increase in the capitalization of the stablecoin Tether (USDT) in 2020. Without a doubt a significant contribution that could indicate where the shots are going in an economy like China.
Continue reading: China blocks bank accounts and cards for cryptocurrency miners and traders
