BEIJING: China has intensified its crackdown on cryptocurrency, declaring all financial transactions involving cryptocurrencies illegal and issuing a nationwide ban on cryptocurrency mining, the power-hungry process in which vast computer networks compete for newly created crypto tokens.
Ten Chinese government agencies, including the central bank as well as banking, securities and foreign exchange regulators, said in a joint statement they would work closely to maintain a “high-pressure” clampdown on trading of cryptocurrencies.
“The Chinese government will resolutely clamp down on virtual currency speculation, and related financial activities and misbehaviour in order to safeguard people’s properties and maintain economic, financial and social order,” the People’s Bank of China (PBOC) said in a statement.
The PBOC also barred financial institutions, payment companies and internet firms from facilitating cryptocurrency trading.
In response to the latest move, bitcoin, the world’s largest cryptocurrency, dropped over 6 percent to $42,2167, having earlier been down about 1 percent. Smaller coins, which typically rise and fall in tandem with bitcoin, also tumbled.
The moves come after China’s State Council, or cabinet, vowed in May to crack down on bitcoin mining and trading as part of efforts to fend off financial risk, sparking a major sell-off of cryptocurrencies.
In June, it told banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies. However, the recent announcement is the clearest indication yet that China wants to shut down crypto-currency trading in all its forms.
Virtual currency mining had been a big business in China before a crackdown that started earlier this year, accounting for more than half of the world’s crypto supply.
