Video: Beijing declares all cryptocurrency transactions illegal

Video: Beijing declares all cryptocurrency transactions illegal

The Chinese central bank reiterated its stance on cryptocurrency on Friday, issuing a memo that bans cryptocurrency transactions and makes it illegal for foreign exchanges to provide services to people in China. “Business activities related to virtual currency are illegal financial activities,” said the People’s Bank of China in a statement posted on its website on Friday afternoon. Beijing accuses cryptocurrencies of “disrupting the economic and financial order” and facilitating “illegal and criminal activities” such as gambling, fraud, pyramid schemes, money laundering and theft.

The advisory explicitly names bitcoin, Ether and TEDA, noting that they “do not have the same legal status as legal tender.” “They are not legal and should not and cannot be used as currency in the market,” reads the notice before listing all cryptocurrency-related activities which are now prohibited. These include managing virtual currency exchange businesses, buying and selling virtual currencies as a central counterparty, providing information intermediation and pricing services for transactions in virtual currencies, financing of the issuance of tokens or derivative transactions in virtual currencies.

Chinese government entities have long opposed cryptocurrencies, and in May, three state-backed financial groups issued a joint statement warning against the use of cryptocurrencies as a form of payment, citing their volatility as a high risk. .

Beijing strengthens its legislation

The largest Chinese banking institutions have asked their customers to refrain from participating in transactions involving cryptocurrency. Cryptocurrencies have been banned for many years in China, but citizens can access them through other means. China has also spent years working on its own digital currency.

As a reminder, Chinese Vice Premier Liu He said in May that the country should also take a stronger stance on cryptocurrencies. The leader’s statement led several cryptocurrency mining operators to shut down. Researchers recently estimated that China is responsible for over 75% of bitcoin’s hashing power or calculations, thanks to China’s access to cheap hardware and energy. the Wall Street Journal notes that mining is supported by hydropower plants in Sichuan and Yunnan, as well as coal in Xinjiang and Inner Mongolia.

Beijing’s decision dropped the price of bitcoin by 4% and that of Ethereum by more than 7% on Friday, according to CoinDesk.

The Chinese central bank reiterated its stance on cryptocurrency on Friday, issuing a memo that bans cryptocurrency transactions and makes it illegal for foreign exchanges to provide services to people in China. “Business activities related to virtual currency are illegal financial activities,” said the People’s Bank of China in a statement posted on its website…

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