The Chinese government has continued its battle against cryptocurrency. After making mining illegal throughout the country, China has now further enforced its anti-crypto stance. With 48% of crypto hashing coming from China, this is a massive blow to the decentralised currency.
Chinese banks ban cryptocurrency
Reported by Bloomberg, the Chinese government has revealed all crypto transactions are now considered illegal. Digital currencies such as Bitcoin, Ethereum and more will no longer be legal to trade within the country.
A statement from the People’s Bank of China states that crypto is no longer considered money in China. Cryptocurrency is disregarded as “legal compensation and should not and cannot be used in the market as money”. The country is also banning crypto exchanges both in and out of the country involving non-Chinese citizens.
As a result of this ban, the price of bitcoin is falling rapidly. In just one hour, the most famous digital currency dropped in value by 6%. Compared to the massive highs of $60,000+ earlier this year, bitcoin is now sitting at just over $30,000.
Why has China banned cryptocurrency?
Despite the country's massive crackdown, cryptocurrency is not illegal to own in China. However, using the digital currency to buy or sell goods is. Additionally, mining cryptocurrency is explicitly banned.
The People’s Bank of China states that cryptocurrency is increasingly being used in criminal situations. Cryptocurrency is being used for “gambling, illegal fund-raising, fraud, pyramid schemes, money laundering”. The bank claims this is “seriously endangering the safety of people’s property”.
When the country banned mining bitcoin and other tokens, the crackdown was implemented to limit massive power usage. Reportedly, the country was worried that the massive energy usage would've seriously impacted the entire country's power supply.