China’s central bank declared on Friday that all transactions which involve Bitcoin and other digital currencies are illegal, thus a campaign was done to block the use of illegal digital money.
The notice which was declared on Friday mentioned Bitcoin, Ethereum and any other digital money is disturbing the financial system and this has increased all the chances of money-laundering and various crimes. The price of Bitcoin was decreased to more than 9%, which would be $41,085, just after the announcement, and all other crypto tokens were decreased as well. Ethereum went down by almost 10%. All of the Chinese banks were banned from handling digital money in 2013, but this year government issued a reminder again. That increased the concern of officials which means cryptocurrency mining and trading might still be going on and the state currency might be indirectly exposed to risks.
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All the companies promoting cryptocurrencies say they accept flexibility, but the Chinese market worries they might weaken the control of the Communist Party over the financial system and say they will help against criminal activity. The People’s Bank of China is in the process of developing an online version for cashless transactions that can be tracked and controlled by Beijing.
Regulators in other countries have already been warned that cryptocurrencies need greater vision. The SEC has won a lot of cases against such frauds in crypto to currency, as Gensler said the companies need Congress to give it more funding to handle the market.
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China had completely banned all cryptocurrency and has planned to end the mining of digital currency, delivering the toughest decision to the industry. All the transactions related to cryptocurrency will be considered illegal financial activity, including services provided by international exchanges, the People’s Bank of China as mentioned on the website. It even that cryptocurrencies cannot be circulated. Bitcoin’s rate was also decreased after the announcement, and it was decreased to 8% to about $41,000 as of 9 a.m. in New York.
The officers in China are further investigating to end all the digital trading for its ties to fraud, money laundering, and excessive use of energy. China already has made certain rules in which banks from offering crypto services. To follow such rules, traders have moved to other platforms and offshore exchanges.
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Crypto mining’s huge energy consumption is the reason the industry is being affected. In a different statement, China’s economic planning company said it’s important to end crypto mining and the crackdown is needed to meet carbon goals. China is facing a huge loss of energy that’s already roiled companies from aluminum to steel, and many have seen their power supplies curbed in the last few weeks.
The country is home to a huge number of the world’s crypto miners and in April they had a 46% share of the global rate, a measure of calculating power used in mining and processing, as mentioned by the Cambridge Bitcoin Electricity Consumption Index.
China’s renewed the defects against crypto mining and trading activity which had begun in May. That was the first time officers had to stop crypto mining since dropping it in 2019and proposed it to be eliminated. The move caused an end in crypto prices, with Bitcoin losing its value to 50% between April and July this year.
