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China’s Crypto AML Overhaul: Key Developments
Chinese authorities are gearing up for a significant amendment to their anti-money laundering (AML) regulations, marking the first major update in 17 years. Reports from regional media suggest that Beijing is poised to include cryptocurrency-related transactions within the scope of its revamped AML rules, responding to calls for increased scrutiny of the nascent crypto industry by policymakers.
State Council Executive Session on AML Law Revisions
Prime Minister Li Qiang recently chaired an executive session of the State Council, deliberating on the proposed changes to the AML law. The initial draft of the revised anti-money laundering regulations surfaced in 2021, gaining momentum as it became part of the State Council’s legislative work plan in 2023. The anticipated timeline indicates that the revised AML law will be officially signed into effect by 2025.
China’s Cryptocurrency Ban and Shift Towards Digital Yuan
In September 2021, the Chinese government took a decisive step by prohibiting all cryptocurrency transactions, citing disruptions to the economic and financial order. Simultaneously, the government has been actively developing a digital yuan (e-CNY) for several years. Despite the formal ban on cryptocurrency circulation and mining, China remains a significant player in the crypto market, boasting the status of the leading mining equipment manufacturer.
Navigating the Global Crypto Landscape Post-Ban
Before the ban on cryptocurrency trading, China held a prominent position in the market, with trading volumes on yuan-denominated crypto exchanges surpassing those in dollar pairs. Notably, major cryptocurrency exchanges like Binance and OKX have roots in China, underscoring the country’s influence in the industry. The forthcoming amendments to AML regulations indicate a strategic shift, prompting a reassessment of China’s role in the global crypto landscape.
As China takes bold steps to reshape its regulatory framework for cryptocurrencies, the global crypto community watches closely, anticipating the potential ripple effects on the industry at large.
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