New York – China’s government on Tuesday announced that the country would begin banning the use of digital currencies in certain areas, including tourism and banking.
The announcement came just two days after the Reserve Bank of India (RBI) said it would stop accepting foreign currency payments for goods and services in India, the first country to do so since 2014.RBI governor Raghuram Rajan also said that the government will begin issuing electronic payment cards and digital currencies to local government employees and the private sector, but will not allow banks to accept the payment.
The move is intended to curb the volatility of virtual currencies, the currency used to buy and sell goods and other services.
The ban will apply to the payment of goods and service in cash and electronic currencies as well as in other forms such as digital tokens, the statement said.
The currency markets in China, where the yuan has lost more than half its value since last year, had been particularly volatile in the past few weeks as investors sought a safer place to invest.
A few weeks ago, the yuan fell more than 10 percent to more than 1,200 per dollar.
The dollar is the currency of choice in the Asian financial centers where trading takes place.
Bitcoin, the world’s most popular cryptocurrency, has been on a tear over the past year, gaining about 200 percent in value.
The cryptocurrency has surged to record highs in recent weeks.
The Chinese government is expected to announce a list of more than 100 “virtual currencies” on Wednesday, Reuters reported.
The new currency rules will be implemented starting January 1 and will be made permanent after three years, according to the Financial Times.
The US is one of several nations, including the EU and Japan, that have imposed restrictions on bitcoin transactions, Reuters said.