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| China's central bank bans cryptocurrency trading |
China has banned all cryptocurrency transactions and vowed to halt digital asset mining in the hardest-hit sectors so far.
The People’s Bank of China has stated that cryptocurrency-related transactions are illegal financial activities, including services provided by external platforms.
He added that cryptocurrencies, including Bitcoin and Tether, are not legal tender and cannot be traded. Bitcoin plummeted after the announcement, dropping 8% to around $40K.
The Chinese authorities have even cracked down on cryptocurrency transactions related to fraud, money laundering, and excessive energy consumption.
China has regulations that prohibit banks from providing crypto services. In order to circumvent these rules, traders turn to offshore trading platforms.
China's ban on all cryptocurrency trading has had a short-term impact on the currency's valuation. But the long-term effects may not be there.
Although there are Chinese speculators in the country, these activities have moved out of the country over the years.
The massive energy consumption in mining is one of the reasons why the industry is being put to the test. In another statement, China's Economic Planning Agency said cracking down on coin mining is an urgent task and that cracking down on cracking is important to achieving carbon targets.
China is facing a serious energy crisis and is struggling with raw materials from aluminum to steel. In the past few weeks, energy supply has declined in many industries.
The country is home to large numbers of miners around the world and recently recorded a global hash rate of 46%. It is a measure of computing power used in mining and processing.
The country's latest crackdown on cryptocurrency
The views of Chinese regulators have always been extreme, and these comments are not new. But the interesting thing is why they keep making these statements. Perhaps this is because they sensed China's reckless activities and therefore needed to move on.
China's renewed crackdown on cryptocurrency mining and trading activities began in May. This is the first time that top officials have chosen to mine cryptocurrency at a national level since they were removed from the list of dirty industries to be phased out in 2019.
The move caused the price of the cryptocurrency to crash and Bitcoin lost about half of its value from April to July of this year.
Although the market has seen some gains since then. But it is still well below its all-time high of $63,000.