PBoC Reportedly Orders Payment Services to Stop Serving Crypto Traders

The Business Administration Department of the People’s Bank of China (PBoC) has reportedly issued a document today requiring payment providers in Beijing to stop facilitating cryptocurrency trading activities.

The news, first reported by Securities Times, a state-owned media outlet launched by the Communism Party mouthpiece the People’s Daily, said the document requires payment companies to start internal investigations to ascertain if cryptocurrency trading activities are being conducted via their payment services. If so, they should subsequently cease servicing those accounts, the document states.

Citing sources familiar with the matter, the news source said the document also requires these companies to report on their investigation and implementation by Jan. 20.

The document, if genuine, may come as part of plans to implement a wider ban on China’s crypto trading scene that was reportedly sought by the PBoC’s vice governor Pan Gongsheng.

Another China-based outlet, the Economic Observer, reported that it has confirmed the veracity of the document through another source close to the central bank.

The Business Administration Department is a Beijing-based division within the PBoC that specifically implements monetary polices in the country’s capital.

According to Securities Times, the document requires payment services within its jurisdiction to comply with its request. While it might appear that the rule only applies to services registered in Beijing, the document requires the firms to extend the investigations across their other branches.

It remains unclear at this stage what immediate impact this may have on China’s remaining cryptocurrency trading activity. Following the ban on initial coin offerings by the PBoC last year, China’s cryptocurrency exchange activities have mostly shifted to over-the-counter (OTC) trading.

For example, Huobi and OKCoin, previously two of the biggest order book exchanges in China, now offer platforms where Chinese residents can advertise their buy and sell orders, and the resulting transactions in cryptocurrencies and fiat currencies are separated. Trading partners would send Chinese Yuan through payment tools such as bank transfers, WeChat Pay and AliPay, which appear to be like any normal transactions between two individuals.

Other OTC platforms also exist through the group chat function of messaging giant WeChat and Telegram. With the data center of the latter service being outside the jurisdiction of the Chinese government, it has become a popular venue for OTC trading among Chinese investors.

A CoinDesk telephone call to the Business Administration Department of the PBoC for comment was not answered.

PBoC image via Shutterstock