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China: Central Bank Warns Businesses Not to Refuse Cash

(July 26, 2018) On July 13, 2018, China’s central bank, the People’s Bank of China (PBOC) issued a circular stating that businesses and individuals must not refuse or discriminate against cash payments. (Zhongguo Renmin Yinhang Gonggao [2018] Di 10 Hao [PBOC Circular [2018] No. 10] (July 13, 2018), PBOC website; Amanda Lee, As China Goes Increasingly Cashless, PBOC Says Cash Payment Is Still Alive, SOUTH CHINA MORNING POST (July 13, 2018).)

In the circular, the PBOC says that the Renminbi is the official currency of the People’s Republic of China, which includes paper bills and coins. No entities or individuals may refuse cash payments, except under circumstances where noncash payments are legally required, such as in e-commerce and unstaffed stores. (PBOC Circular, supra.)

“Safe and legal noncash payment tools” are still encouraged, according to the PBOC, as long as they are used alongside cash. The PBOC Circular also reminds banks and nonbank payment institutions not to require or induce others to reject or discriminate against cash payments. Businesses or individuals have one month from the publication of the circular to make necessary adjustments, after which the PBOC and its branches will work with relevant authorities to investigate breaches. (Id.)

China is going increasingly cashless. From January to October 2017, mobile payment transactions reached a record 81 trillion yuan (about US$12.8 trillion), according to official government statistics. (Lee, supra.)