Beijing’s announcement sent cryptocurrencies tumbling.
On Friday, the central bank of China declared all cryptocurrency-related transactions illegal in an attempt to step up the country’s crackdown on the trillion-dollar industry.
“Virtual currency-related business activities are illegal financial activities,” a statement on the People’s Bank of China website reads.
Cryptocurrency trading has given rise to the disruption of “economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes and money laundering, and seriously endangering the safety of people’s property,” the bank’s statement says.
“This isn’t the first time China has threatened action, and, thus far, it has failed to follow through,” said George Monaghan, analyst at GlobalData’s thematic team. “The next few weeks will be rough for crypto markets that were already on edge after the SEC’s recent comments, but only actual legislation will have a long-term effect.”
China has long expressed its opposition to cryptocurrencies in part because of its links to money laundering and exorbitant energy use, and earlier this year, Chinese officials confirmed a long-standing ban prohibiting financial firms from actively helping mine and sell cryptocurrencies. to curb energy-intensive digital currency mining and currency exchanges domestically and internationally. Although Beijing eschews Bitcoin, Ethereum, and other cryptocurrencies, China aims to be one of the leading countries in introducing its own digital currency, the e-yuan.
