China has strengthened regulations to control the use of cryptocurrencies, with the State Administration of Foreign Exchange (SAFE) requiring banks to monitor and identify risky trades involving digital assets.
This is part of the government’s efforts to crack down on underground banking, cross-border gambling, and illegal financial activities related to cryptocurrencies.
Banks in mainland China are now required to thoroughly investigate high-risk transactions, including the source of funds and trading frequency, and take necessary precautions to limit services for individuals and entities suspected of engaging in such activities.
These measures show Beijing’s continued stance on cryptocurrencies as a potential threat to the country’s financial stability.
According to lawyer Liu Zhengyao, the new rules will strengthen the legal basis for penalizing crypto trading and make it more difficult for individuals to bypass China’s foreign exchange regulations using cryptocurrencies.
Converting yuan into cryptocurrencies for cross-border transactions is now classified as a high-risk activity, and transactions exceeding legal limits will be subject to stricter monitoring.
