The cryptocurrency market has suffered a severe setback that is causing the price of bitcoin, ethereum or cardano to plummet: China has banned cryptocurrency transactions and has promised to end illegal mining.
The Central Bank of China (People’s Bank Of China, PBOC) has published a statement on its website in which declares all cryptocurrency transactions illegal, including foreign exchange services to Chinese citizens.
This implies that all cryptocurrencies are prohibited from circulating in the Asian countryincluding bitcoin and tether as they are not fiat currencies. And not only that: the Chinese bank has also promised end illegal mining, noting that it is imperative to end this illegal activity to promote the growth of the country’s economy.
The reaction of the market to this statement has not been long in coming. After the announcement, the price of bitcoin, ethereum, cardano or solana, among other cryptocurrencies, has experienced a major decline.
At the time of writing, the price of bitcoin is down 5.31%, ethereum 8.74%, cardano 8.88% and solana 8.37%, according to CoinMarketCap data.
This new stick puts the finishing touch to a black week for the cryptocurrency market, which last Monday experienced a collapse of more than 10% in all cryptocurrencies as a result of the crisis of the real estate developer China Evergrande Group.
As Bloomberg explains, the Asian country has long expressed its dissatisfaction with these digital assets due to their links to fraud, money laundering and energy waste.
The Chinese government’s fight against cryptocurrencies goes back a long way, and the first time it banned bitcoin operations was in 2013. In 2017 it outlawed ICOs and banned cryptocurrency trading, and in 2021 it has taken even more drastic measures.
Last May, China announced that it was banning banks from trading cryptocurrencies, and a few weeks later it closed 90% of mining farms across the country. Now, the Chinese executive has decided to take a stronger step by banning all transactions and promising to end illegal mining.