For the nth time, China bans cryptocurrencies
Coin prices drop after People's Bank reiterates crackdown
China has once again banned cryptocurrencies.
It's not even the first time this month Beijing's done so, let alone the first time ever, yet word of the reiterated crackdown sent coin prices tumbling, which may have been the ultimate goal. After all, China would prefer its citizens use its non-illegal digital yuan.
Bitcoin fell by 5.5 per cent, Ethererum by 7.4 per cent, and Dogecoin by 14.9 per cent, for instance, after this latest announcement and have since rebounded somewhat.
"Carrying out legal currency and virtual currency exchange business, exchange business between virtual currencies, buying and selling virtual currencies," it continued, "providing intermediary and pricing services for virtual currency transactions ... and other illegal financial activities are strictly prohibited and resolutely banned in accordance with the law.
"Those who carry out related illegal financial activities constitute a crime shall be investigated for criminal responsibility in accordance with the law."
Not only are these activities banned within China, the government’s top bank also said residents are forbidden from using overseas cryptocurrency exchanges. Banks are not allowed to provide any digital coin services, and companies are also barred from promoting or advertising cryptocurrency businesses and platforms.
Beijing also promised to surveil any suspicious “virtual currency transaction hype activities,” online and offline, and said it had the ability to keep close tabs on transactions and mining to catch any lawbreakers. It claimed cryptocurrencies are "disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering, seriously endangering the safety of people’s property."
The People's Bank also urged various government bodies to step up efforts against cryptocurrencies.
The announcement follows officials shutting down some of the country’s biggest cryptocurrency mining hubs in June, causing the price for graphics processors units to plummet.
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Purging all cryptocurrency-related activities from the Middle Kingdom seems to be a challenge for the authorities. Again and again, the nation's ruling elite has issued heavy-handed statements banning Bitcoin and the like. Earlier this year, the State Council Financial Stability and Development Committee, an agency in charge of financial risk management, called for crypto-coin mining and trading to be stopped.
Other government bodies have insisted banks cannot process and store customers’ cryptoassets nor provide any insurance or investment services using virtual currencies. This latest announcement rehashes those same rules; China has declared crypto-funds to be illegal several times over the years, forcing homegrown exchange Binance to move its headquarters offshore.
China may be ramping up its efforts to rid itself of cryptocurrencies, but judging from the government's repeated edicts, its citizens seem to have found ways to continue trading the digital money nonetheless. ®