A couple of official announcements in Shanghai and Beijing show an intensification of regulatory pressure on bitcoin and other cryptocurrencies in China. On Friday, November 22, the People's Bank of China strengthens regulation (PBOC) office in Sangai published a notice updating its rules to restrict crypto coins in that area. A few days earlier, in Beijing, local financial authorities pointed out the illegality of the operations of exchange houses of crypto coins.

According to the <a href="https://www.reuters.com/article/us-china-blockchain-shanghai/china-central-bank-cracks-down-on-cryptocurrency-trading-in-shanghai-idUSKBN1XW152">information</a>, the authorities of Shanghai PBOC, a municipality considered China's leading commercial and <a href="https://www.cryptoknowmics.com/crypto/china-sets-up-a-national-standards-committee-for-blockchain/">financial</a> center, maintain that they have evidenced the resurgence of operations related to crypto coins. In response, they decided to take more vigorous measures to "strengthen regulation and control, reduce trade in crypto coins.

"The issuance, financing, and trade of virtual currencies involve multiple risks," said a statement from PBOC, in which they assure that they will take measures to rectify and withdraw these activities.

In a <a href="https://twitter.com/DoveyWan/status/1197807060877901825">thread of tweets</a> from @DoveyWan, founding partner of Primitive Ventures, a firm focused on cryptoactives, he said the measures imply the illegalization of different modalities of crowdfunding with cryptocurrencies, similar to the initial currency offers (ICO), banned since 2017.

Wan pointed out that, in addition to ICOs, figures such as futures initial offers (IFOs), exchange houses (IEOs), and value or security tokens (STOs) are now banned in Shanghai. PBOC considers them "illegal, unauthorized public offerings and issuance of securities, potentially illegal fundraising, financial fraud, pyramid schemes, and other crimes," the specialist wrote.

Besides, the monetary authority says it will immediately withdraw the cryptocurrency trading platforms currently serving the Chinese market, which are registered abroad. According to Wan, this implies greater regulation of exchange houses whose servers are outside the mainland but provide services to Chinese residents. Besides, "they will continue to strengthen the cleanliness of fiat currency settlement and payment gateways and channels," Wan said.

Reinforcing the Chinese government's "blockchain yes, Bitcoin no" speech, the PBOC office document warns investors to be careful not to confuse "blockchain technology with cryptocurrencies. Wan says the information had been known since last weekend, and that Chinese investors expected such a statement to come out.

China strengthens regulation banned operations with cryptocurrencies in its territory in 2017; however, after President Xi Jinping's recent statements in favor of blockchain networks, interest in cryptoactives increased markedly. As reported by CryptoNews, the Chinese president's public statements, at the time, boosted the actions of Chinese technology companies, including the price of bitcoin.

Another announcement released earlier this week by Beijing's local financial authorities takes a different course, according to Melody He, who identifies himself on Twitter as co-founder and partner of The Spartan Group. He pointed out that the entity, instead of a frontal ban as in Shanghai, chose to state that it "never actually approved any branch of bureaux de change.

Melody He points out that, despite this claim, OKEX and Huobi are headquartered in Beijing, and the regulator thoroughly monitors their operations. "We can assume they are 'approved' by Beijing," He said.

It should be noted that, according to reports reflected by CriptoNoticias in October this year, the trade of bitcoin in China, using a vehicle the anchored cryptocurrencies or stablecoin Tether, had a rebound towards the end of the third quarter. According to a study by Chainalysis Inc., Chinese traders access bitcoin through OTC (over-the-counter) markets, where tether was used in 99% of the bitcoin trade in China, almost wholly displacing the yuan.

China strengthens regulation to restrict bitcoin and other cryptocurrencies

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China strengthens regulation to restrict bitcoin and other cryptocurrencies

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