For years now, China has had a difficult relationship with the crypto industry. In time, however, that relationship started getting worse and worse, especially now as the country is about to release its own cryptocurrency on a nationwide scale. All other cryptos, which might be competitors to its upcoming digital yuan must, therefore, be eliminated.
Throughout the year, the country has been working on removing crypto miners from its country, as the majority of those who mine Bitcoin (BTC/USD) came to China due to its cheap electricity. Now, finally, its anti-crypto campaign reached a new level as the country officially made all crypto transactions illegal.
China’s citizens are no longer allowed to make crypto transactions
According to a recent statement by China’s central bank, The People’s Bank of China (PBOC). Bitcoin, Ethereum, Tether, and all other coins are fully prohibited from circulating on the market. Any and all business activities related to cryptos are banned and illegal in the country.
The only thing that people residing in China can do with cryptocurrencies is own them, and not much else.
The bank claims that it was all done due to the risks that crypto trading carries with it, and that its goal is to protect investors. Its citizens will also not be allowed to engage in trading on foreign platforms serving China, as that is also deemed illegal, and anyone caught engaging in crypto-related activities after this day will be severely punished.
Francine Lacqua of Bloomberg speculated on Twitter that the move might be China’s newest attempt to stem capital outflows. Meanwhile, Gabor Gurbacs, the director of VanEck, says that this newest move will likely result in massive amounts of capital relocating out of China.
Is Beijing looking to stem capital outflows?
— Francine Lacqua (@flacqua) September 24, 2021
Meanwhile, the country continues to come up with plans to banish even the small number of remaining miners who managed to find sanctuary in some of the provinces that have not moved against them as of yet.
Amid the chaos, Bitcoin price saw a massive 5% drop, going from nearly $45k to $42,977 in a matter of minutes.
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