Business & Economy

China tries to deal final blow to cryptocurrency use

Shanghai/Beijing, Sep 25 (EFE).- The decision taken by China’s central bank to make illegal cryptocurrency-related activities triggered speculation about whether or not it will definitely stop operating in the Asian country.

The People’s Bank of China, along with nine other Chinese government institutions such as the Cyberspace Administration and the Ministry of Public Security, pointed out that virtual currency transactions facilitated several illegal criminal activities such as money laundering, illegal fundraising, fraud and pyramid schemes, among others.

The central bank said Bitcoin, Ethereum and other virtual currencies issued by non-monetary authorities do not have the same status as the legal tender of the country and therefore cannot circulate in the market as currency.

The statement also urged the local authorities to increase supervision to build a system of prevention and elimination of speculation risks.

After the announcement, Bitcoin and Ethereum dropped by some 8.6 percent and 9.27 percent respectively, although the losses moderated to around 6 percent in both cases.

This is at least the seventh time that China takes restrictive measures against virtual money since 2013, Coindesk reported.

“Each time the effect is smaller and more short-lived,” Ulrik K. Lykke, executive director at crypto hedge fund ARK36 said.

“The ‘China bans bitcoin’ story has gained almost a meme-like status in the bitcoin community because of this,” he added.

Other analysts highlighted a change from previous measures taken by Beijing.

“The latest clarification would suggest those involved are at risk of prosecution,” Craig Erlam, senior markets analyst from the Oanda foreign exchange agency.

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