In the wake of several days of dramatic action in the Bitcoin markets, China’s central bank issued a strong warning to the nation’s investors as it urged them to adopt a rational approach with respect to digital currency investments. According to the People’s Bank of China (PBOC), the fluctuations in Bitcoin’s prices have been abnormal of late, and that abnormality should cause investors to be more cautious in their decision-making process.
The PBOC also held meetings with representatives from the nation’s Bitcoin exchanges. Though those meeting were private, some details have slowly emerged. Caixin has reported that the central bank has attempted to put new restrictions on exchanges by telling them that they are not permitted to market their services to potential new users by including mentions of the yuan’s depreciation. That reportedly led some exchanges to set aside planned marketing efforts that would have used that messaging to attract new customers.
The central bank also took the opportunity to remind exchanges that they needed to refocus on remaining in compliance with anti-money laundering (AML) and know-your-customer (KYC) laws. According to some reports from exchange operators, the meeting involved nothing new, and there was no indication that it was called due to fears that the yuan might be further harmed by Bitcoin activity. It is perhaps worth noting, however, that the meeting comes at a time when there are reports that the State Administration of Foreign Exchange (SAFE) is currently examining whether Bitcoin is being used to bypass the nation’s existing capital controls.