On 18 May 2021, National Internet Finance Association of China, China Banking Association and the Payment and Clearing Association of China jointly released the “Announcement on Preventing Speculative Risks in Virtual Currency Trading” (the “Announcement”, 关于防范虚拟货币交易炒作风险的公告). Pursuant to the Announcement, the virtual currency is not a legal tender, but a specific virtual commodity, which is not issued by monetary authorities, not recognized by law as a means to settle any debt, has no mandatory acceptance or other attributes of currency, and thus shall not and cannot not be used as a legal tender in the market.
In accordance with the Announcement, members such as financial institutions and payment institutions shall practice with enhanced social responsibilities, and are prohibited from using any virtual currency for product or service pricing, underwriting any virtual currency-related insurance policy or include any virtual currency in any insurance policy coverage, or directly or indirectly providing customers with any other service related to virtual currencies.
Subsequently, on May 21, the Financial Stability and Development Committee of the State Council in a conference explicitly proposed to crackdown on Bitcoin mining and trading activities. This was the first time that the State Council put forward clear requirements for cracking down on bitcoin mining and trading activities.
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