Draft of a new cryptocurrency law in China: CBDC legalization, will be heavily fined for violating

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The Central Bank of China - People's Bank of China (PBOC), has announced the draft law on the purpose of providing a regulatory framework and legitimacy for the upcoming central bank's digital currency ( CBDC), the digital yuan. 

The bill clearly states that the renminbi is the official currency of the People's Republic of China whether in physical or digital form.

The bill also appears to be aimed at those intending to launch a yuan-backed cryptocurrency.

Specifically, it is said that individuals and organizations are prohibited from producing and issuing a digital currency designed to 'replace' the circulation of the digital yuan.

Perhaps China wants to criminalize all renminbi-backed stablecoins of third parties.

Sanctions against violators are said to be very tough: such as confiscating all profits, destroying all tokens, fines (the penalty can be 5 times the amount of profits), yes subject to criminal prosecution and imprisonment.

The People's Bank of China is asking for public comments on this new bill until November 23.

See more: DCEP / CBDC China National Crypto Currency Overview

Many sources have previously said that China is maximizing the issuance of digital yuan before the Winter Olympics in Beijing in February 2, and according to a recent disclosure, China has may launch this coin sooner.

Earlier this month, China conducted a massive test of its digital yuan payment system.

In Shenzhen City, about 47.500 people received free digital yuan (worth about $ 30), over 3.389 stores across the city that accepted payment in the currency.

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