The Bank of China expressed disapproval of cryptocurrency trading activities through its official WeChat account.
In a post on WeChat, the bank makes mention of market manipulation, which it suggests exists in exchanges where leveraged trading causes them to “explode”
According to the bank,
“First of all, the amount of fraud transactions with bots is serious. The average turnover rate of the top three overseas crypto currency exchanges is much higher than that of foreign licensed exchanges. Second, market manipulation exists in these exchanges where forced leveraged trading eventually causes the exchanges to explode. Third, money laundering is a big issue.”
In China’s national newspaper, an article titled ‘Bitcoin: the first successful application of blockchain technology’, the author lays the foundation for educating the public on the cryptocurrency. It states that Bitcoin is the first successful application of blockchain technology and goes on to provide description of the technical underpinnings of the technology.
Earlier in the year in January, the price of Bitcoin in China rose from $9,150 to $9,400 in less than five minutes. The sudden spike marked a 83-day high for the cryptocurrency in Asia.
With a global recession in the works, China looks to prepare its economy to rebound beyond challenges and achieve growth for its populace. Reports reveal that the People’s Bank of China is working on issuing its own digital currency. It is collaborating with private companies to complete the development of the sovereign digital currency. Laws are currently being drafted to prepare for the circulation of the digital currency. It is likely that the laws will involve guidelines for businesses involved in digital currency activity.
The Shenzhen Stock Exchange (SSE), based in the technology capital of China released an index in 2019 to track the performance of 50 blockchain firms. The index shows the performance of companies listed on the exchange that participate in the blockchain industry.