China announces complete ban on cryptocurrencies
It comes amid preparations for an economic slowdown, with fears about property giant Evergrande going bust and people wanting to move their money out of China.
Friday 24 September 2021 12:58, UK
The People's Bank of China (PBoC) has announced that all cryptocurrency-related financial activities are illegal, including transactions, providing pricing services, and launching new tokens.
According to a notice published on the central bank's website, it will be illegal for Chinese residents to purchase cryptocurrencies from overseas and even be involved in marketing or technical support relating to crypto businesses.
The authenticity of the announcement has been confirmed by Sky News' bureau in Beijing, but follows an announcement falsely claiming US retail giant Walmart would soon be accepting the cryptocurrency Litecoin, believed to have been perpetrated by people seeking to artificially inflate that cryptocurrency's value.
Sky News visited a secret Bitcoin mining farm in China earlier this year, shedding light on the world's centre for Bitcoin mining - accounting for 65% of the global total, according to researchers from the University of Cambridge.
At the time of the visit, Bitcoin mining wasn't illegal.
"Chinese miners are trying to make money quick before something happens," explained Nishant Sharma at the time.
"And that something is usually related to legalities around Bitcoin mining," added the Beijing-based founder of BlocksBridge Consulting, which specialises in mining.
Today's designation appears to finally criminalise mining.
It follows another ban announced in May in China on financial institutions and payment companies providing services related to cryptocurrencies - causing the value of Bitcoin to plummet by more than 20%.
A further slide for the infamously volatile cryptocurrency happened in June, sparked by China's central bank urging the country's largest banks and payment firms to crack down harder on trading in cryptocurrencies.
An automatic translation of the central bank's announcement said cryptocurrencies have been "disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering, [and] seriously endangering the safety of people's property".
The announcement added that the central bank had established a coordination mechanism to deal with the risks posed by cryptocurrencies alongside China's main security and regulatory bodies, and mentioned tracking transactions and mining activities.