Key Sentence:
- China’s central bank has declared that all cryptocurrency transactions are illegal, effectively banning digital tokens like Bitcoin.
“Business activities related to virtual currencies Cryptocurrency are regular financial activities,” said the People’s Bank of China, warning that “the safety of people’s assets is at serious risk.”
China is one from the largest cryptocurrency markets in the world. The fluctuations there often affect global cryptocurrency prices. Bitcoin price has fallen by more than $2,000 (£1,460) due to China’s announcement. It is the latest in China’s national crackdown on what it sees. As the most volatile speculative investments – and at worst, a way to launder money.
Cryptocurrency trading has been officially banned in China Cryptocurrency since 2019 but continues online by foreign exchange. However, there was severe repression that year. In May, Chinese government intuition warned buyers that they would have no protection from trading Bitcoin. And other currencies online as government officials pledged to increase pressure on the industry.
In June, he urged banks and payment platforms to stop facilitating transactions and ban currency “mining” – trading in powerful computers to create new coins.
A Bitcoin media caption explains: How do cryptocurrencies work?
However, Friday’s announcement is the most unambiguous indication that China wants to stop cryptocurrency trading in all its forms. The statement made clear that those involved in “illegal financial activity” committed a crime and would be prosecuted. Foreign websites offering such services to Chinese citizens online are also illegal, he said.
The technology behind many cryptocurrencies, including Bitcoin. Relies on many distributed computers that review and verify transactions in a giant shared ledger called the blockchain. As of September 2019, China accounted for 75% of global bitcoin energy consumption. However, by April 2021, this had dropped to 46%.