China Internet Finance Association and other institutions: Financial and payment institutions are not allowed to engage in virtual currency-related businesses.

A joint statement from the China Internet Finance Association, China Banking Association, and China Payment and Clearing Association was released to prevent speculation risks in virtual currency trading. In contrast to the open attitude in the United States, the announcement states: "Financial and payment institutions are not allowed to engage in business related to virtual currencies."

Financial and Payment Institutions Prohibited from Engaging in Virtual Currency Business

According to the announcement, financial institutions and payment institutions are not allowed to engage in cryptocurrency payments, insurance, trading, settlement, custody, mortgages, and other related services. It is evident that banks and payment platforms like Alipay are prohibited from trading, custody, and providing financial services related to cryptocurrencies.

The announcement states:

"Financial institutions, payment institutions, and other member units must enhance their social responsibilities and are not allowed to price products and services with virtual currencies, underwrite insurance business related to virtual currencies or include virtual currencies in the scope of insurance liabilities, directly or indirectly provide other services related to virtual currencies to customers, including but not limited to:

• Providing customers with services such as registration, trading, clearing, and settlement of virtual currencies;
• Accepting virtual currencies or using virtual currencies as payment and settlement tools;
• Engaging in the exchange services between virtual currencies and RMB or foreign currencies;
• Providing services such as storage, custody, and mortgages of virtual currencies;
• Issuing financial products related to virtual currencies; using virtual currencies as investment targets for trusts, funds, and other investments, etc.

Financial institutions, payment institutions, and other member units should strengthen the monitoring of virtual currency transaction funds, rely on industry self-regulation mechanisms, enhance risk information sharing, improve the level of industry risk prevention and control, take timely measures to restrict, suspend, or terminate relevant transactions and services in case of illegal activities, and report to relevant departments. They should also actively use multiple channels and diversified means to enhance customer publicity and warning education, and proactively provide virtual currency-related risk alerts.

Internet platform companies are not allowed to provide network operation venues, business displays, marketing promotions, and paid traffic services for virtual currency-related business activities. If any relevant issues are discovered, they should promptly report to the relevant departments and provide technical support and assistance for related investigations and investigations."

Comparison with the United States: OCC Allows Cryptocurrency Custody and Banking Services

The situation in the United States is different.

The Office of the Comptroller of the Currency (OCC), a bureau within the U.S. Department of the Treasury, has issued a public letter clarifying the rights and legality of national banks and federal savings associations to provide cryptocurrency custody services to customers. The organization stated in the letter that providing cryptocurrency custody services (including safeguarding cryptocurrency private keys) falls within the modernization of traditional banking services in the custody business.

Furthermore, several cryptocurrency service providers have applied to become custodian banks. National trust banks are national banks that engage in limited trust activities and are allowed to operate under the direct jurisdiction of the U.S. federal government, bypassing state laws.

Private payment companies like PayPal and Venmo are also actively promoting cryptocurrency trading and payment services.