People’s Bank of China (PBoC) Pilots Restrictions on Large-Scale Cash Transactions

The restriction pilot for these transactions will last for about two years.

The goal of the launch of the RMB token is to complement the current fiat currency, rather than compete against it.

The People’s Bank of China (PBoC) has had a lot of attention lately with their many changes in the crypto industry. Now, it looks like the central bank is looking to combat money-related criminal activities with a new restriction. The restriction, which will first be piloted for two years, will restrict large-scale cash transactions for three specific regions within the country – the Hebei Province, Zhejiang Province, and Shenzhen City. One expert believes that this decision is meant to help with the launch of the Renminbi token (RMB), which has yet to be released.

As the PBoC sees it, the use of large cash transactions creates an ideal opportunity for criminals to engage in illegal activities, like tax evasion, money laundering, and corruption. Business accounts will be restricted from exceeding 500,000 yuan ($71,000) in their large-amount cash deposits/withdrawals, while persona accounts will have restrictions from 100,000 yuan ($14,000) to 300,000 ($43,000). However, the restrictions on personal accounts will depend on the province in which the customer is located.

Specific industry sectors will also see their large-value cash transactions restricted by the PBoC, like the real estate industry in Xingtai City. Other industries that should expect to see more control by the PBoC include Qinhuangdao City’s medical industry records and Zhejiang Province’s automobile sales industry and large-scale cash withdrawals. The staff of PBoC stated,

“Under the requirements of large-scale cash management, banks need to deepen their understanding of current customers, strengthen risk warning information communication for customers who are prone to generate large cash transactions, and guide them to use non-cash payment tools.”

Based on the new restriction pilot, Primitive Ventures founding partner Dovey Wan believes that this plan will be creating the ideal environment for the Renminbi token.