Bitcoin Value Drops After China Ban Crypto Transactions

The value of Bitcoin has declined sharply, following China’s central bank announcement on Friday, September 24, that all transactions of crypto-currencies are illegal, effectively banning digital tokens such as Bitcoin in the country, Newspremises reports.

China is said to be one of the world’s largest cryptocurrency markets and 95 percent of crypto mining occurs in Asian countries.

“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said, warning it “seriously endangers the safety of people’s assets”.

After the announcement, the price of Bitcoin fell by more than $2,000.

This is said to be the latest in China’s national crackdown on what it sees as a way to launder money and speculative investment.

Although cryptocurrency trading was officially banned in the Country in 2019, it continued online through foreign exchanges.

Newspremises recalls that, in May 2021, Chinese state intuitions warned buyers they would have no protection for continuing to trade Bitcoin and other virtual currencies, as government officials vowed to increase pressure on the industry.

Then in June, it told banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies – the trade of using powerful computers to make new coins. In September 2019, China accounted for 75% of the world’s Bitcoin energy use. By April 2021, that had fallen to 46%.

Following their announcement on Friday, it is now clear that those who are involved in “illegal financial activities” are committing a crime and would be prosecuted, in China.

The statement also added that foreign websites providing such services to Chinese nationals online is also illegal activity.