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Dimapur, September 24 (EMN): The People's Bank of China (PBoC) on Friday announced that all crypto-related transactions are considered illegal and called for a formal ban. It cited concerns around national security and the "safety of people’s assets."
On its website, the central bank stated that all cryptocurrencies, including Bitcoin and Tether, cannot be circulated in the market as they are not fiat currency. It opined that the rise in usage of cryptocurrencies has disrupted "economic and financial order" and helped proliferate "money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities."
The bank has told internet, financial and payment companies to stop cryptocurrency trading on their platforms. It said that any transactions involving crypto are now considered illegal and warned offenders that they will be "investigated for criminal liability in accordance with the law." Foreign exchanges are also prohibited from offering services to Chinese citizens.
China’s central bank is warning the citizenry of “illegal” behavior when it comes to #cryptocurrency use. https://t.co/bbwMBuy3Rj
— Bitcoin News (@BTCTN) September 24, 2021
Following the announcement, the price of Bitcoin has slipped around 5% to $42,810 at the time of writing this article. Other cryptocurrencies suffered similar fates like Ethereum falling 7% to $2,893 and Dogecoin falling 7% to $0.20.
China's stance on cryptocurrency has always been known since it made trading of cryptocurrency illegal back in 2019. But Chinese traders continued to trade online using the help of foreign exchanges.
This year, however, China has stepped up its crackdown on cryptocurrency. In May, the country warned buyers that they would not get protection for trading cryptocurrencies online and in June, it said that its officials had arrested more than 1,000 people in connection with online cryptocurrency trading. It has also closed much of the country's vast network of bitcoin mining operations.