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Reasons behind China's ban on cryptocurrency

The Chinese government has said all crypto related transactions are illegal and must be banned.

Although cryptocurrency trading was ban in the country in 2019, it continued trading online through foreign exchanges.

In a statement by the People's Bank of China on it's website, it said that: "All cryptocurrency including Bitcoin and Tether are not fiat currency and cannot be circulated on the market. All crypto-related transactions including services provided by offshore exchanges to domestic residents are illicit financial activities".

The directive has sent the strongest signal from the Chinese government on it determination to crack down on the industry. This has made Bitcoin dropped as low as 5.5% on Friday. This comes as global market grow increasing concern over debt crisis involving property developer China Evergrande group. The Chinese government may also be responding to signs that miners are disguising their activities to stay in business.

Head of Asian pacific with cryptocurrency, Luno in Singapore Vijay Ayyar said while the Chinese government had made similar statement in the past, "it is a slightly nervous environment for crypto with the recent SEC comments and overall macro environment with the Evergrande news. So any comment of this nature will cause a sell-of of risky assets.

In a statement, the nation's economy planning agency also said it is an urgent task for china to root out crypto mining, and the crackdown is important to meet carbon goals.

However there has been a fall in the value of Bitcoin after the ban by china. The price of Bitcoin fell by more than $2,000.

Following the announcement on Friday, it is now clear that cryptocurrency trading in the country is now illegal and those involved in it will be persecuted.

The statement by the People's Bank of China also added that foreign websites providing such services to Chinese nationals online is an illegal activity.

Content created and supplied by: Unveiler (via Opera News )

Bitcoin China Luno Singapore Vijay Ayyar


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