Chinese Authorities to Amend AML Regulations for Cryptocurrency Transactions
Chinese authorities are making significant preparations to update their anti-money laundering (AML) regulations, according to regional media reports. Beijing is planning to include cryptocurrency-related transactions in its AML rules, reflecting the growing calls from policymakers for increased scrutiny of the crypto industry. This will mark the first major revision of China’s AML regulations in 17 years since their inception in 2007.
The State Council, led by Prime Minister Li Qiang, recently held an executive session to discuss the revised AML law. The initial draft of the updated regulations was proposed in 2021 and has been included in the State Council’s legislative work plan for 2023. It is expected to become law by 2025.
Prior Actions and Current Crypto Landscape in China
In September 2021, the Chinese government implemented a ban on all cryptocurrency transactions, citing concerns about private digital assets disrupting the economic and financial order and facilitating criminal activities. However, despite the ban, China remains a prominent market for cryptocurrencies. The country is a leading manufacturer of mining equipment, and several major exchanges such as Binance and OKX have Chinese roots.
Before the trading ban, yuan-denominated crypto exchanges in China had higher trading volumes compared to exchanges offering dollar pairs.
Hot Take: China Strengthens AML Regulations for Cryptocurrencies
The move by Chinese authorities to amend their anti-money laundering regulations signals their commitment to addressing potential risks associated with cryptocurrency transactions. By including cryptocurrencies in their AML rules, they aim to enhance oversight and mitigate illicit activities within the crypto industry. This regulatory update aligns with China’s previous ban on cryptocurrency transactions and reinforces their push for a digital yuan. As one of the largest players in the global crypto market, China’s actions will likely have a significant impact on the industry’s future developments.
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