China bans crypto currency transactions

Last Friday, China’s central bank, the People’s Bank of China, said that crypto currency transactions are illegal as such currencies “do not have legal tender status” and therefore “cannot be circulated as currency in the market.” In a statement, the Chinese central bank said that bitcoin and other virtual currency transactions have disrupted economic and financial order by contributing to a rise in “money laundering, illegal fund-raising, fraud, pyramid schemes, and other illegal and criminal activities.”

Therefore, crypto transactions have been defined as a criminal financial activity in China. The Chinese central bank said China will “resolutely curb the hype of virtual currency transactions, severely crack down on illegal financial activities and illegal criminal activities related to virtual currencies, protect the safety of the people’s property in accordance with the law, and make every effort to maintain economic and financial order and social stability.”

It is to be noted that Friday’s announcement is the culmination of an ongoing crackdown on crypto assets in China. Earlier, in May, the Chinese government began to issue warnings about trading in mining crypto currencies. In June, the bank told financial institutions to stop processing digital currency transactions.

According to Bloomberg, one of the major reason for the Chinese crackdown on crypto currencies is the amount of energy needed to mine crypto currency transactions. China is in an energy crisis which played havoc in some of the country’s main industries. Following these announcements, crypto currency prices were down sharply. Investors need to keep an eye on announcements made by central governments all over the world to trade and invest in crypto currencies.

Michael Turner
Michael Turner is an environmental activist with broad, deep experience in print and online writing, publication and site management, news coverage, and editorial team management.