On Friday, China’s continued with its strong policy against cryptocurrency. It declared that all crypto currency activities were illegal. It noted that it would come down hard against digital currency in the market. The latest crackdown is its harshest ever denouement on digital currency.
The People’s Bank of China (PBOC) website said that the following activities were illegal:
- services that offered trading
- order matching
- issuing of tokens and derivatives for virtual currencies
- Overseas crypto exchanges who offered services in mainland China.
The PBOC said that the following will be banned from trading in crypto currency:
- financial institutions
- payment companies
- Internet platforms.
This indicated that there is virtually a total ban on cryptocurrency activities in the country.
According to translations by CNBC, PBOC said that workers of foreign crypto exchanges would be under investigation. It also said that it had improved systems that could monitor crypto-related transactions. These systems could also find out speculative investing. This would effectively stop the “hype” in trading and mining digital currency.
As per Coin Metrics data, mid-morning Friday ET, Bitcoin fell by 6.4 percent within a day and stood at approximately $41,882 while Ethereum slid by 9 percent and stood at approximately $2,867. Stocks related to digital currency also fell on the NASDAQ. Coinbase fell by 2 percent, MicroStrategy fell by 5 percent and Riot Blockchain saw the largest fall by more than 6 percent.
Earlier China had stopped mining of cryptocurrency calling it illegal as well as a huge drain on power. A large number of digital miners used coal to mine the currency. China’s recent targets to cut back on emissions have been one of the main reasons for the harsh crackdown on digital currencies. China is the main emitter of carbon and has carbon neutral target by 2060.
Other reasons mentioned have been the scope of illegal transactions and activities using crypto assets. Beijing is also developing its own digital currency. It has begun rolling out a virtual version of the yuan in certain regions of the country.