The Central Bank of China announced this Friday that all cryptocurrency transactions are considered illegal in the country, including Bitcoin.
“The commercial activities related to virtual currency are illegal financial activities“, Indicated the institution, warning that” it seriously endangers the security of people’s assets.
China is one of the largest cryptocurrency markets in the world. Fluctuations there often affect the global price of cryptocurrencies.
After the announcement, the price of Bitcoin fell more than $ 2,000.
The ban in China is the latest in a series of offensives against what Beijing sees as a speculative and volatile investment at best, and money laundering at worst.
Movements from Beijing
Cryptocurrency trading was officially banned in China since 2019. However, it has continued to be done online through foreign transactions.
In May, financial authorities warned buyers that they could lose their money and the following month banks and payment platforms received notifications to prevent cryptocurrency transactions.
But Friday’s announcement is the clearest indication so far that China wants to shut down cryptocurrency trading in all its forms.
The statement makes it clear that those involved in “illegal financial activities” they are committing a crime and will be prosecuted.
And foreign websites that provide such services to Chinese citizens online are also considered illegal.
Mining migration
The technology at the core of many cryptocurrencies, including Bitcoin, is based on thousands of computers distributed around the planet that verify and control transactions in a ledger known as a blockchain.
New “coins” are randomly awarded as a reward for those who participate in that work known as crypto “mining”.
China, with its relatively low electricity costs and cheaper computer hardware, has long been one of the world’s leading mining centers.
But the Chinese crackdown on cryptocurrencies it has already affected the “mining” industry.
Beijing banned the trade in high-capacity computers to be used in this activity.
The effect is clear: while in September 2019, 75% of the world’s energy use of Bitcoin was concentrated in China, by April 2021 it had fallen to 46%.
eltiempolatino.com