China’s central bank wants to ban the issuance and sale of competing digital yuan tokens.
The PBOC provides for severe penalties for entities that create digital tokens to the value of the yuan.
The bill will be an update to the country’s 2003 central bank laws
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With another cryptocurrency-related ban, China’s central bank is now accepting public comment on a bill that seeks to pave the way for the digital yuan.
In 2017, the Chinese ban on Bitcoin Evolution and crypto trading created a shock wave in the market. Since then, the country’s authorities have continued to impose restrictions on cryptocurrency trading.
PBOC plans tough penalties for cryptocurrency issuers
According to a bill released on October 23, the People’s Bank of China (PBOC) is calling for public comment on its plan to ban the issuance of cryptocurrencies.
In the document, we find the following extract:
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.
As part of this project, the PBOC defined the yuan as both a physical bank note and its digital equivalent. With ICOs already banned, it looks like the latest law could target stablecoin issuers or entities that create tokens that are seen as competitors to the yuan.
In addition, the bill also provides for a fine in the amount of five times the proceeds from the sale of these tokens. If the bill passes, the issuers of these digital assets will have to go out of business and forgo all income from the sale of crypto currencies.
In a tweet about it , Chinese journalist Colin Wu revealed that this news likely marks the first appearance of cryptocurrency-related issues in China’s official banking laws. The ban on issuing crypto currencies is one of many new amendments in the draft document that will likely replace the 2003 Central Bank Act.
It could be the first time that cryptocurrency has officially appeared in Chinese law.
By banning the issuance and sale of tokens that could compete with the digital yuan, it appears the PBOC is preparing for the release of its central bank’s digital currency.
As BeInCrypto previously reported, the country’s Digital Electronic Money (DCEP) project is currently undergoing multiple trials in major Chinese cities.
In early October, the Shenzhen government has made the airdrop tokens DCEP worth $ 1.5 million to 50 000. As of the end of September, the DCEP has reportedly made $ 160 million in payments from more than 3 million transactions.