For its Financial Stability Report 2021, the People’s Bank of China has announced that its crackdown on virtual currencies has been successfully completed. 

Zhou Xiaochuan, former governor of the Chinese central bank, said after the release of the central bank’s report that traditional regulatory methods are not enough to deal with illegal activities, especially on money-laundering activities. 

Colin Wu, a Chinese journalist, said that Xiaochuan intends to send a message that the government should launch more intensive crackdowns aimed at money laundering to prevent it from further flourishing. 

Destabilizing cryptos

Last June, the Chinese authorities arrested more than 1,100 suspects in various money-laundering activities that utilize cryptocurrencies. 

The crypto-related criminalities in China were so severe that in 2020, the country ranked high in sending and receiving massive amounts of money to and from the darknet through money laundering.

In a data released by Chainalysis, it revealed that darknet vendors typically launder funds through cryptocurrency services based in China. 

Losing grip?

Xiaochuan also said there is a high necessity for the government to utilize modern technologies to better manage cryptocurrencies. According to him, even though the central bank has said that it has already put cryptos under control, it is clear that cryptocurrencies can escape from its grip anytime. 

Cryptos are so innovative and disruptive that they have become one of the primary tools that are being used on crimes today, which the government, even with its broad clampdowns, is finding it hard to stamp out the illicit operation permanently. 

On top of these problems, the government is not expected to establish any major policy announcements on cryptos until the end of the year. 

But it appears that the government was already confident of its latest achievements in its campaign against cryptos. In the past few months, the Chinese authorities have been stopping crypto mining operations, which has led to a “mass exodus” of mining operators. 

Image courtesy of Cointelegraph News/YouTube

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