Bitcoin exchanges and service providers should know their customers well in order to curb untoward transactions, the People’s Bank of China (PBoC) said on Thursday, urging the bourses to report any suspicious deals to help prevent money laundering through the peer-to-peer cryptocurrency.
In a statement issued jointly with the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission, the central bank said bitcoin trading platforms should follow the nation’s rules to keep proper records and convey necessary information to the telecoms regulator. Bitcoin has a higher risk of being used by criminals for money laundering, it said.
Bitcoin is a not legalized currency and does not serve the purpose of a monetary unit, the PBoC said. It is a virtual commodity and should not be used in the market as a currency, it said. People who use bitcoin in online transactions have to bear their own risks, the statement said.
Financial institutions are not allowed to use bitcoin in pricing or trading, the PBoC said, adding that it should not be used in offering insurance, registration, trading, and settlement and clearance services for customers. The institutions should not issue bitcoin-related financial products, it said.
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