Bank of China Blast on Crypto, Says Bitcoin is Not a Safe Haven

Ibiam  |  Mar 23, 2020

Over weeks now, some, if not all, the financial markets have been bleeding badly following the Coronavirus outbreak. Notably, people are continually looking out for viable alternatives to shield against losses caused by the market crash.

Bank of China Refutes Cryptos as a Solution 

Many people considered digital currencies, especially Bitcoin (BTC), as the right solution; however, this is not the case for the central bank of China. The Bank of China published a post on its official WeChat account on March 22, refuting cryptos to be a solution.

In the post, which was titled "3.15 Protection of Financial Consumption Rights and Interests," the central bank called out the three main scams which are commonly faced in the industry, particularly with cryptocurrency exchanges.

At first, the bank mentioned that the rate of fraudulent transactions with bots is getting intense.

"The average turnover rate of the top three overseas cryptocurrency exchanges is much higher than that of foreign licensed exchanges".

Another concern raised by the bank was on the existence of market manipulation in these exchanges, where also forced leveraged trading eventually makes the crypto exchanges to explode. Thirdly, it added that money laundering with cryptocurrency is a big issue.

For Bitcoin, the Bank of China stated that the world's most valuable cryptocurrency is not a safe haven, as many people had claimed; it is too volatile. Again, the central bank urged people to abstain from joining the crowd in crypto investment.

China's Stance on Cryptocurrency Trading

The trading of cryptocurrencies is not a thing for China. For a long time now, the Bank of China has been demonstrating anti-crypto actions. Entities like Alipay had to ban Bitcoin and cryptocurrency-related transactions.

Meanwhile, the bank plans to launch a Central Bank Digital Currency (CBDC) and has already begun research on it. Earlier in January, the bank announced it made significant progress researching the concept last year.

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