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China Bans Cryptocurrency Transactions, Digital Coins Tumble World Over

China Bans Cryptocurrency Transactions, Digital Coins Tumble World Over

All cryptocurrency-related transactions are illegal and must be banned, China’s central bank said, sending the strongest signal yet on its determination to crack down on the industry.

Ten Chinese government agencies, including the central bank as well as banking, securities, and foreign exchange regulators, said in a joint statement that they would work closely to maintain a “high-pressure” crackdown on speculative trading of cryptocurrencies.

All cryptocurrencies, including bitcoin and tether, are not fiat currency and can’t be circulated on the market, People’s Bank of China said on its website. All crypto-related transactions, including services provided by offshore exchanges to domestic residents, are illicit financial activities, the PBOC said in the statement. The regulator will also bar financial institutions, payment companies, and internet firms from facilitating cryptocurrency trading, and will strengthen monitoring of such activities.

The government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehavior to safeguard people’s properties and maintain economic, financial, and social order,” the PBOC said in a statement on its website.

The National Development and Reform Commission said it was launching a nationwide crackdown on crypto mining. Previous restrictions have been issued by local governments.

Bitcoin dropped as much as 5% on Friday. Ether also tumbled, as did other crypto stocks.

“Crypto markets are in an extremely frail state overall, and these sorts of downswings speak to that; there’s a degree of panic in the air,” Joseph Edwards, head of research at crypto broker Enigma Securities, told Reuters.”Crypto continues to exist in a grey area of legality across the board in China.”

Shares in cryptocurrency and blockchain-related firms also came under pressure with US-listed miners Riot Blockchain, Marathon Digital, and Bit Digital slipping between 4.1% and 5.1% in premarket trading. Crypto exchange Coinbase Global fell 2.7%.

Earlier this year, Chinese authorities said they would crackdown on cryptocurrency mining, sparking a massive sell-off of bitcoin and other coins

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