People’s Bank of China Proclaims Bitcoin is Not a Legitimate Payment Method

The Governor of the People’s Bank of China, Zhou Xiaochua, has announced that the central bank does not accept Bitcoin or any other digital currencies as legitimate forms of payment.

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According to Reuters, China’s annual parliament session took place on Friday, where Zhou Xiaochua had a chance to address the current scope of cryptocurrencies in China with reporters. “We do not currently recognize Bitcoin and other digital currencies as a tool like paper money, coins and credit cards for retail payments,” adding that “The banking system does not accept it.”

According to Zhou’s statements, China was initially for the creation of the blockchain, and even implemented some of the existing technology in certain sectors of the economy. However, concerns over the rapid applications of the technology were overwhelming and led to concerns over the potential risks associated with it.

Zhou added: “If they spread too rapidly, it may have a big negative impact on consumers. It could also have some unpredictable effects on financial stability and monetary policy transmission.”

China’s Ongoing Crypto Crackdown

Cryptocurrencies have been the topic of discussion among Chinese regulators over the past year. After clamping down on crypto trading, by closing cryptocurrency exchanges, China took matters to the next level in September of last year, by issuing a complete ban of ICOs in the country. The ban was implemented without notice, and was effective immediately, which cause a strong reaction across the market.

China was not done with its crackdown. The next step was to address the expanding sector o Bitcoin mining, due to the increasing number of mining operations that were turning up across mainland China. The government assessed the situation, and followed that by asking mining companies and operations to begin making an “orderly exit” from the country.

Just a few weeks later in early February, China’s government decided to block access to all cryptocurrency websites from within China, thereby limiting any exposure to the industry for its citizens.

The decisions caused markets to decline substantially across the board, and took place just after an  influx of crypto investors that had been seen in the industry’s relatively short history.