China cracks down on Bitcoin, bans cryptocurrency trading and mining

Friday, September 24, 2021 - 20:37
Point Trader Group
China cracks down on Bitcoin, bans cryptocurrency trading and mining

China's most powerful regulator on Friday tightened a crackdown on cryptocurrencies by imposing a blanket ban on all cryptocurrency transactions and mining operations, affecting Bitcoin and other major cryptocurrencies and putting pressure on cryptocurrency-related stocks and blockchain technology.

Ten entities, including the central bank and regulators for affairs, securities and foreign exchange, have pledged to work together to root out "illegal" crypto activity, the first time that Beijing regulators have united to explicitly ban all crypto-related activities.

China in May banned financial institutions and payments companies from providing services related to cryptocurrency transactions, and issued two similar bans in 2013 and 2017.

Today's statement is the most detailed and comprehensive to date by the country's major regulators, underscoring Beijing's insistence on throttling China's cryptocurrency market.

The move comes amid a global crackdown on cryptocurrencies, as governments from Asia to the United States fear that highly volatile, privately managed cryptocurrencies will undermine their control over financial and monetary systems, increase systemic risk, foster financial crime and harm investors.

It is also concerned that “mining,” the energy-intensive computational process through which bitcoin and other currencies are mined, could affect global environmental goals.

Analysts say that China also sees cryptocurrencies as a threat to the sovereign digital yuan, which has reached an advanced stage of beta testing.

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