Chinese regulators are introducing new rules obliging banks to monitor and report suspicious cryptocurrency transactions. The innovations relate to customer identification, verification of sources of funds, and monitoring the frequency of transactions.

The main purpose of the rules is to combat illegal activities such as cross—border gambling, the use of underground banks and cryptocurrency transactions. The yuan used to buy cryptocurrencies and exchange for foreign fiat currencies will also be subject to controls.

Lawyers believe that these measures will strengthen China's prohibitive policy on cryptocurrencies, which has been in effect since 2019. However, the country remains the second largest holder of bitcoins, accumulating assets through confiscation.