The People's Bank of China, in conjunction with thirteen departments, has launched a special action to comprehensively crack down on virtual currency trading speculation, with regulatory measures being upgraded.

The reason is straightforward: the popularity of cryptocurrencies is increasing in the fifth and sixth-tier cities in mainland China, but a large number of activities are linked to pyramid schemes and fraud, which have already affected financial stability.

1️⃣ Negative impacts:

• The risk for OTC merchants and acceptance businesses has significantly increased;

• Information flow and capital flow related to relevant businesses in the country will face stricter scrutiny.

2️⃣ Positive impacts:

• Hong Kong will further become a major export for compliant cryptocurrency businesses, benefiting the local cryptocurrency industry.

Overall, the mainland is tightening regulations, while Hong Kong benefits.