China’s central bank says all cryptocurrency-related activities are illegal, vows harsh crackdown
In this photo illustration, the Bitcoin logo is seen on a mobile device with People’s Republic of China flag in the background. (Photo Illustration by t/SOPA Images/LightRocket via Getty Images)
Budrul Chukrut | SOPA Images | LightRocket | Getty Images
China’s central bank renewed its tough talk on bitcoin Friday, calling all digital currency activities illegal and vowing to crack down on the market.
In a Q&A posted to its website, the People’s Bank of China said services offering trading, order matching, token issuance and derivatives for virtual currencies are strictly prohibited. Overseas crypto exchanges providing services in mainland China are also illegal, the PBOC said.
“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity,” the PBOC said, according to a CNBC translation of the comments. Workers of foreign crypto exchanges will be investigated, it added.
The PBOC said it has also improved its systems to step up monitoring of crypto-related transactions and root out speculative investing.
“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the bank said, reiterating past comments.
The price of bitcoin sank about 4% on the news, last trading at around $42,378. Ethereum, the second-largest digital asset, fell over 8% to $2,868.
It’s not the first time China has gotten tough on cryptocurrencies. Earlier this year, Beijing announced a crackdown on crypto mining, the energy-intensive process that verifies transactions and mints new units of currency. That led to a sharp slump in bitcoin’s processing power, as multiple miners took their equipment offline.
– CNBC’s Evelyn Cheng contributed to this report.
