BEIJING (Reuters) – China’s central bank said on Friday that all financial transactions involving cryptocurrencies were illegal, a death knell for digital trade in China following a crackdown on volatile currencies.
The global values of cryptocurrencies, including bitcoins, have fluctuated significantly over the past year due to Chinese regulations, which have sought to curb speculation and money laundering.
The People’s Bank of China (PBOC) said in an online statement on Friday, “Virtual currency-related business activities are illegal financial activities.
The notice prohibits all related financial activities, including cryptocurrency trading, such as trading cryptocurrencies, selling tokens, transactions involving virtual currency derivatives, and “illegal fundraising.”
The bitcoin, which was falling before the announcement, fell 7.57% to 35 41,320 by 1235 GMT. It was trading at $ 42,464, down 5.0 percent around 1030 GMT.
The central bank said that in recent years the trade in bitcoins and other virtual currencies has been “widespread, disrupting the economic and financial system, money laundering, illegal fundraising, fraud, pyramid schemes and other illegal and criminal activities.” Gives birth. “
The PBOC said it was seriously endangering the safety of people’s assets.
Although corrupt creation and trade has been illegal in China since 2019, further crackdowns by Beijing this year have warned banks to suspend related transactions and shut down the country’s vast network of bitcoin miners.
Friday’s statement from the central bank sent the strongest signal yet that China is closed to corruption.
Bitcoins, the world’s largest digital currency, and other cryptocurrencies cannot be traced through a country’s central bank, making them difficult to control.
Analysts say China fears the proliferation of illegal investment and fundraising in the world’s second-largest economy, which includes stricter rules on capital outflows.
The crypto crackdown also opens the door for China to introduce its own digital currency, which is already in the pipeline, allowing the central government to monitor transactions.
In June, Chinese authorities said more than 1,000 people had been arrested for using profits from crime to buy corrupt currency.
Several major Chinese provinces have banned the operation of cryptocurrency mines since the beginning of this year, with one area accounting for eight percent of the computing power needed to run a global blockchain.
The value of the bitcoin plummeted in May after Beijing warned investors against speculation in cryptocurrencies.