Cryptocurrencies have had a rough couple of months for a few reasons, including concerns about the environmental impact of mining coins and increasing government scrutiny.
This week, crypto is catching a lot of heat from China, which has for weeks been signaling a more aggressive push to curtail use of such currencies.
“Cryptocurrency trading and speculative activities … breed the risks of illegal cross-border transfers of assets and money laundering,” the central bank said.
The lenders included the Industrial and Commercial Bank, the Agricultural Bank of China, China Construction Bank, the Postal Savings Bank of China and the Industrial Bank.
All six institutions said after the central bank announcement that no institutions or individuals are allowed to use their platforms for any crypto-related activity. Alipay also pledged to step up investigations against crypto transactions on its platform.
The announcement isn’t a new policy for Beijing, but it does reinforce how far the country is willing to go to restrict the usage of bitcoin and other digital coins.
While China doesn’t completely ban cryptos, regulators in 2013 declared that bitcoin was not a real currency and forbade financial and payment institutions from transacting with it. At the time, they cited the risk that bitcoin could be used for money laundering, as well as the need to “maintain financial stability” and “protect the yuan’s status as a fiat currency.”
The growing crackdown is also in part to boost China’s state-backed digital yuan initiative, which authorities want to implement so they can keep money flows in check.