Credit: Wall Street Journal, 9/24/2021
https://www.wsj.com/articles/china-...yptocurrency-transactions-illegal-11632479288
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China’s central bank said all cryptocurrency-related transactions are illegal, reinforcing the country’s tough stance against digital rivals to government issued money.
In a statement posted on its website on Friday afternoon, the People’s Bank of China said the latest notice was to further prevent the risks surrounding crypto trading and to maintain national security and social stability.
Cryptocurrencies weakened following the statement. The price of bitcoin fell more than 8%, compared with its level at 5 a.m. ET Thursday, before paring some of those losses. The cryptocurrency fetched just under $41,370 per bitcoin, according to CoinDesk. Ether tumbled more than 11% to trade at about $2,795.
Naming bitcoin, ether and tether as examples, the central bank said cryptocurrencies are issued by nonmonetary authorities, use encryption technologies and exist in digital form and shouldn’t be circulated and used in the market as currencies.
It also said it is illegal for overseas exchanges to provide services for residents in China through the internet.
China banned cryptocurrency exchanges from operating within its borders several years ago, but individuals in the country have continued to find ways to trade bitcoin and other digital currencies via over-the-counter or peer-to-peer transactions.
Price of one bitcoinSource: CoinDeskAs of Sept. 24, 10:05 a.m. ET
Sept. 23Sept. 2440,00041,00042,00043,00044,00045,000$46,000
In May this year, a powerful Chinese superregulator pledged to crack down on bitcoin trading and energy-intensive mining, helping to send the price of bitcoin tumbling. Financial regulators in the country have also gotten tougher on banks and payment companies and in June ordered them to take a more active role in weeding out crypto-related transactions.
The statement was dated Sept. 15 but it was only posted onto the central bank’s website at 5 p.m. local time on Friday.
The statement called for a comprehensive monitoring system, giving local governments “full play” to monitor their regions and flag early warnings. It vowed to crack down on “illegal financial activities” related to cryptocurrencies, and investigate employees of foreign cryptocurrency exchanges inside China as well as others in the industry who continued to advertise or provide crypto-related services.
“The message was very, very strong today,” said Naeem Aslam, chief market analyst at brokerage AvaTrade. “They are really saying no one can have any association with cryptocurrencies.” At the same time, Mr. Aslam said, “we’ve always known China has been against cryptocurrencies.”
Chinese regulators have worried that cryptocurrencies’ decentralized, anonymous transactions facilitate money laundering and illegal capital flight out of the country. There are signs that its resolve to crack down on cryptocurrencies has grown stronger in recent months.
Its toughening stance against the sector also coincides with Beijing’s push to develop a state-backed digital currency, which would give the government vast new tools to monitor both its economy and its people.
https://www.wsj.com/articles/china-...yptocurrency-transactions-illegal-11632479288
---
China’s central bank said all cryptocurrency-related transactions are illegal, reinforcing the country’s tough stance against digital rivals to government issued money.
In a statement posted on its website on Friday afternoon, the People’s Bank of China said the latest notice was to further prevent the risks surrounding crypto trading and to maintain national security and social stability.
Cryptocurrencies weakened following the statement. The price of bitcoin fell more than 8%, compared with its level at 5 a.m. ET Thursday, before paring some of those losses. The cryptocurrency fetched just under $41,370 per bitcoin, according to CoinDesk. Ether tumbled more than 11% to trade at about $2,795.
Naming bitcoin, ether and tether as examples, the central bank said cryptocurrencies are issued by nonmonetary authorities, use encryption technologies and exist in digital form and shouldn’t be circulated and used in the market as currencies.
It also said it is illegal for overseas exchanges to provide services for residents in China through the internet.
China banned cryptocurrency exchanges from operating within its borders several years ago, but individuals in the country have continued to find ways to trade bitcoin and other digital currencies via over-the-counter or peer-to-peer transactions.
Price of one bitcoinSource: CoinDeskAs of Sept. 24, 10:05 a.m. ET
Sept. 23Sept. 2440,00041,00042,00043,00044,00045,000$46,000
In May this year, a powerful Chinese superregulator pledged to crack down on bitcoin trading and energy-intensive mining, helping to send the price of bitcoin tumbling. Financial regulators in the country have also gotten tougher on banks and payment companies and in June ordered them to take a more active role in weeding out crypto-related transactions.
The statement was dated Sept. 15 but it was only posted onto the central bank’s website at 5 p.m. local time on Friday.
The statement called for a comprehensive monitoring system, giving local governments “full play” to monitor their regions and flag early warnings. It vowed to crack down on “illegal financial activities” related to cryptocurrencies, and investigate employees of foreign cryptocurrency exchanges inside China as well as others in the industry who continued to advertise or provide crypto-related services.
“The message was very, very strong today,” said Naeem Aslam, chief market analyst at brokerage AvaTrade. “They are really saying no one can have any association with cryptocurrencies.” At the same time, Mr. Aslam said, “we’ve always known China has been against cryptocurrencies.”
Chinese regulators have worried that cryptocurrencies’ decentralized, anonymous transactions facilitate money laundering and illegal capital flight out of the country. There are signs that its resolve to crack down on cryptocurrencies has grown stronger in recent months.
Its toughening stance against the sector also coincides with Beijing’s push to develop a state-backed digital currency, which would give the government vast new tools to monitor both its economy and its people.
