China speaks out all crypto-currency trades illegal

China central bank has made all cryptocurrency transactions illegal and has effectively banned digital tokens like Bitcoin.

“Commercial activities related to virtual currency are illegal financial activities,” the People’s Bank of China said, warning that “it seriously jeopardizes the security of people’s assets.”

China is one of the largest cryptocurrency markets in the world.

The global price of cryptocurrencies is often influenced by fluctuations.

Bitcoin’s price fell to over $ 2,000 (£ 1,460) after China’s announcement.

This is China’s recent national crackdown on what it sees as a volatile and speculative investment in the best sense of the word, and as a way to launder money for the worst.

Trading in cryptocurrencies in China has been officially banned since 2019 but continues online via foreign exchanges.

However, there was severe repression that year.

In May, the Chinese State Intelligence Agency warned buyers that they would have no protection from trading Bitcoin and other currencies online as government officials vowed to increase pressure on the industry.

In June, he called on banks and payment platforms to stop facilitating transactions and put a ban on “mining” currencies – the compromise of using powerful computers to make new coins.

However, Friday’s announcement is the clearest signal that China wants to end cryptocurrency trading in all its forms.

The statement makes it clear that those who are involved in “illegal financial activities” are committing a criminal offense and will be prosecuted.

And foreign websites that offer such services to Chinese citizens online are also illegal, he said.

Mining migration

The technology behind many cryptocurrencies, including Bitcoin, relies on many distributed computers that review and monitor transactions in a large common ledger called a blockchain.

As a reward, those who take part in this work, the so-called cryptocurrency “mining”, will randomly receive new “coins”.

With its relatively low electricity costs and cheap computer hardware, China is one of the largest mining centers in the world.

So many demands are placed on the company that gamers sometimes blame the industry for a global shortage of high-performance graphics cards that miners use to process cryptocurrencies.

The Chinese raid has already hit the mining industry.

In September 2019, China was responsible for 75% of Bitcoin’s global energy consumption. By April 2021, this had dropped to 46%.

Translate »