- China’s central bank wants to ban the issue and sale of tokens competing with the digital yuan.
- The PBOC provides for severe sanctions for entities that create digital tokens at the value of the yuan.
- The bill will update the country’s 2003 Central Bank Laws.
With another ban related to cryptography, China’s central bank is now accepting public comment on a draft law that seeks to pave the way for the digital yuan.
By 2017, China’s ban on ICOs and crypto trading had created a shockwave in the market. Since then, the country’s authorities have continued to impose restrictions on the trade in cryptography.
The PBOC provides for severe penalties for issuers of cryptoskills.
According to a draft law published on 23 October, the People’s Bank of China (PBOC) is calling for public comments on its proposed ban on the issuance of cryptomoney.
The document contains the following excerpt:
No unit or individual is allowed to create or resell tokens, coupons and digital tokens to replace the circulation of Chinese yuan in the market.
For the purposes of this project, the PBOC has defined the yuan as both a physical banknote and its digital equivalent. As ICOs are already prohibited, it appears that the latest law could target stablecoin issuers or entities that create tokens that are considered competitors to the yuan.
In addition, the bill also provides for a fine of five times the proceeds from the sale of these tokens. If the bill is passed, the issuers of these digital assets will be required to cease operations and forfeit all revenues from the sale of crypto currency.
In a tweet on the subject, Chinese journalist Colin Wu revealed that this news probably marks the first appearance of cryptomony-related issues in China’s official banking laws. The ban on issuing crypto currency is one of many new amendments in the draft document that will probably replace the 2003 Central Bank Law.
By prohibiting the issuance and sale of tokens that could compete with the digital yuan, it appears that the PBOC is preparing for the introduction of its central bank’s digital currency.
As BeInCrypto has already reported, the country’s Digital Electronic Currency Project (DCEP) is currently undergoing multiple trials in major Chinese cities.
In early October, the Shenzhen government airdropped DCEP tokens worth $1.5 million to 50,000 inhabitants. By the end of September, DCEP had reportedly made $160 million in payments from more than 3 million transactions.