According to a recent study, the Chinese government has recognized the new threat that cryptocurrencies provide in terms of assisting drug trafficking.
Chinese news source Nncc626 reported on June 23 that the authorities classified a shift in the flow of drug money from online bank transfers to cryptocurrencies as a new phenomena in the 2021 report.
Drug traffickers are reportedly using gaming money to promote illicit commerce. It has emerged as one of the least welcoming nations to cryptocurrencies. Overall, authorities emphasized that as criminals hunt for ways to get around the system. According to China, Drug trafficking is increasingly shifting online.
With increased usage of money, drug distribution, and person-to-person transaction methods, the drug market is expanding online. Drug capital transfers have expanded beyond online bank transfers to virtual currency and game currency.
Efforts to outlaw cryptocurrencies
The Chinese government’s efforts to outlaw cryptocurrencies were probably sparked by the use of cryptocurrency to facilitate drug trafficking. Notably, the state banned cryptocurrency-related activities in 2021, including mining and trading. It was based on the grounds that the industry threatens financial stability.
Chinese institutions have pledged to cooperate to stop “illegal” cryptocurrency activity. It includes the central bank and banking, securities, and foreign exchange regulators.
China has been implementing laws governing virtual currencies with greater rigour. But it has now declared all actions associated with them to be unlawful. And made it clear that it intends to be even stricter about doing so.
The People’s Bank of China (PBOC), the country’s central bank, declared that it was unlawful to promote cryptocurrency trading. It would penalize anybody who did so harshly, even those who worked for foreign platforms from within China.
In an effort to completely wipe out cryptocurrency mining, the National Development and Reform Council (NDRC) said that it would start a national crackdown on the practice.