China’s crackdown on cryptocurrency is harder this time around. On Friday, the Chinese regulators pronounced all cryptocurrency-related transactions illegal.
The people’s republic of China has once again put forth its anti-crypto policy. Central Bank has said that cryptocurrency poses a threat to national security and the “safety of people’s assets”. The foreign cryptocurrency exchanges are also banned from providing digital assets-related services to the people residing in China.
China has banned crypto services two times in the past as well. However, the regulators seem to be more sure about their decision this time. The joint statement of 10 Chinese government agencies depicted their willingness to maintain a high-pressure crackdown on crypto trading in the mainland.
People’s Bank of China has issued orders barring digital, financial payment companies from enabling crypto trading on their platforms.
Logic Behind China’s Crackdown on Cryptocurrency:
The Chinese government wants to not only ban the trading, mining, and exchange services of crypto but also any activities relating to crypto market speculation, etc. Statement of People’s Bank of China read that the government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehavior in order to safeguard people’s properties and maintain economic, financial and social order”.
The regulators also hinted towards the illicit usage of digital currency. According to Central Bank, the increased use of crypto is giving proliferating “money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities,”.
China cracks down on crypto during every bull run. The country brought forth a ban in 2013 and 2017 as well. Many see it as routine now. Nevertheless, the decision caused an 8% slump in bitcoin’s price as noobs panic sold their holdings.
Digital Yuan is in competition with cryptocurrency in China. Therefore, China’s crackdown on cryptocurrency is becoming stern with time.