- China has stepped up its crackdown on cryptocurrencies.
- Promises to eradicate “illegal” business, ban mining
- Bitcoin, small coins have fallen
Shanghai / London, September 24, 2011 (FBC) – China’s top regulators on Friday cracked down on crypto and blockchain-related stocks by hitting bitcoin and other major currencies by banning blankets on all crypto transactions and mining. They have intensified their campaign.
Ten agencies, including central bank, finance, guarantee and foreign exchange regulators, have pledged to work together to root out “illegal” cryptocurrencies.
Explanation: What is new about the action taken by China Crypto?
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In May, China banned financial institutions and payment companies from providing crypto-trading services, and imposed similar bans in 2013 and 2017.
Repeated bans highlight the challenge of closing gaps and identifying bitcoin-related transactions, although banks and payment companies have said they support the effort.
Friday’s statement is still the most detailed and comprehensive of the country’s top regulators, signaling a determination to suppress Beijing’s Chinese cryptocurrency market.
“This is the most direct and comprehensive regulatory framework in the history of crypto market regulation in China,” said Winston Ma, an assistant professor at the UNU’s Law School.
The move comes amid growing concerns that governments from Asia to the United States could lose control of highly sensitive digital currencies, increase system risk, encourage financial crime, and hurt investors.
They are also concerned that the “mining” process, in which bitcoin and other tokens are generated, is harming global environmental goals.
Chinese government agencies have repeatedly raised concerns that cryptocurrency could undermine Beijing’s economic and financial system.
Analysts say China also sees cryptocurrency as a threat to its sovereign digital-yuan, which is at an advanced stage.
“Beijing is so hostile to economic freedom that its people cannot even afford to participate in the most exciting innovation in decades,” said Pat. Tommy, a senior Republican in the United States.
While U.S. regulators are closely monitoring digital asset risks, they say they offer opportunities, including the promotion of financial inclusion.
The People’s Bank of China (PBOC) says crypto currencies should not be used and that overseas exchanges should not be offered to investors in China. It also prohibits financial institutions, payment companies, and Internet companies from facilitating cryptocurrency transactions nationwide.
The government is “determined to limit the value of the imaginary currency, to protect people’s property and to maintain economic, financial and social order,” says PBOC.
China’s National Development and Reform Commission (NDRC) has announced that it is working to cut off financial aid and mining supplies that could jeopardize carbon offsets.
Bitcoin, the world’s largest cryptocurrency, lost more than 9% before repairing those losses. It decreased by $ 41,937 by 6.6% around 12 00 00 ET. Traditional coins, much like bitcoin, have also fallen.
China’s cabinet pledges to monitor bitcoin mining and trade in May. Friday’s news broke hopes among crypto-fans that the cabinet could not comply with the threat.
“This crypto mining and trading profile will be available in May,” New York said.
The move hit some trade deficits in the early hours of the morning, hitting cryptocurrency and blockchain stocks.
US-listed miners Riot Blockchain (RIOT.O), Marathon Digital (MARA.O) and Bit Digital (BTBT.O) fell between 2.5% and 5%, while San Francisco crypto exchange Coinbase Global (COIN.O) fell. 1%
Despite the initial shock, analysts said that while companies continue to dominate crypto products and services, they do not expect the attack to erode global crypto-currency values in the long run.
The exposure of major crypto exchanges and payment companies was not immediately clear. Binance, the world’s largest, has been banned in China since 2017, the spokesman said. Coinbase spokesman declined to comment. The international payment company PayPal (PYPL.O) does not provide crypto services in China, the spokesman said.
Crypto exchanges OKEx and Huobi originated in China but are now overseas, and analysts say they may still be severely affected by some Chinese users. Tokens associated with the two exchanges fell by more than 20%. The exchanges did not immediately respond to requests for comment.
However, the Chinese government has in the past struggled to control Internet users.
“China’s actions have not stopped the rise of crypto in the past, so I’m not surprised it will come back once,” wrote Craig Erlam, an Oanda currency broker.
Prior to May, virtual currency was traded in China, covering more than half of the world’s crypto supply, but miners are moving overseas.
“The losers are all Chinese,” said Christopher Bendkinson, head of research at CoinShares, a digital asset manager. Citing Kazakhstan, Russia and the United States, he said, “We now lose about $ 6 billion in annual mineral revenue, all of which flows into the rest of the world.”
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Reporting from the Shanghai News Agency; Alun John in Hong Kong and Tom Wilson in London; Additional report by Krystal Hu in New York; Writing by Michelle Price in Washington; Correction by Nick Mafia, Carmel Crimes, Emilia Citole-Matarias and Gills Elguud
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