Beijing bans bitcoin, but when did it all go wrong for cryptocurrencies in China?

With the announcement that it plans to block all websites related to cryptocurrency trading and initial coin offerings – including foreign platforms – Beijing has left no one in any doubt of its position on the highly volatile commodity.

But its views on the currency, or asset class – depending on your point of view – has not always been so fervent, as this timeline shows:

China to stamp out cryptocurrency trading completely with ban on foreign platforms

Pre-2013

Bitcoin is barely on the radar of financial regulators as China adopts a relatively hands off approach to the cryptocurrency.

December 2013

The People’s Bank of China (PBOC) and four other financial regulators issue a joint notice outlining the risks associated with bitcoin.

Beijing states that it is not a currency, and prohibits banks and other financial institutes from trading in it. At the same time, the government acknowledges the cryptocurrency as a “commodity traded online” and allows the public to buy and sell it as they please, with its only proviso being that they do so at their own risk.

April 2014

Central bank governor Zhou Xiaochuan describes bitcoin as an asset class – like rare stamps – and says the government is not even considering banning it.

January 2016

The PBOC says it plans to issue a sovereign digital currency that could help to reduce the cost of circulating banknotes, promote economic activity and aid the fight against money-laundering.

The Chinese bitcoin mining machine sellers immune to the cryptocurrency crackdown

January 2017

After conducting investigations at China’s three biggest bitcoin exchanges – BTC China, Huobi and OkCoin – in Beijing and Shanghai, the central bank accuses them of a lack of internal risk controls and issues a warning to investors to that effect.

Following the inspections, the exchanges begin upgrading their security and anti-money-laundering systems, which leads to a temporary suspension on all withdrawals of bitcoin and Litecoin being introduced in February.

BTC China was one of three bitcoin exchanges accused by the People’s Bank of China of having a lack of internal risk controls. Photo: EPA

Early 2017

The central bank sets up a research institute dedicated to digital currencies.

Bitcoin latest: prices, policies and politics

July 2017

Chinese exchanges lift their suspension on withdrawals of cryptocurrencies.

Chinese bitcoin exchanges suspended withdrawals of the cryptocurrency from February to July last year. Photo: EPA

September 2017

Beijing deems initial coin offerings illegal and orders all mainland-based cryptocurrency exchanges to shut down.

Lloyd’s Bank to ban credit card owners from buying bitcoin, says report

January 2018

The Leading Group of Internet Financial Risks Remediation – China’s top internet-finance regulator – issues a notice asking local governments to “actively guide” bitcoin-mining operations to “orderly” quit the business.

The central bank – according to a report by the official Securities Times – orders financial institutions to stop providing banking services or funding for any activity related to cryptocurrencies.