China Cracks Down on Cryptocurrency
China Makes Cryptocurrency Illegal
China stepped up its crackdown on crypto last week, announcing that all activities associated with digital currencies in the country are now illegal. The People’s Bank of China said it is also illegal for international exchanges to operate in the country. Mobile payment apps are also prohibited from offering crypto services. The news sent Bitcoin (BTC), Ethereum (ETH), and other digital tokens lower. Companies related to cryptocurrency saw their stocks decline as well.
China’s Move Spooks Investors
As part of its ban on cryptocurrency, China said it is developing new systems to protect the country from the risks created by cryptocurrencies. Beijing’s hardline stance spooked investors who were already worried about increased oversight by the US Securities and Exchange Commission. But some believe that the crypto market will recover, pointing to the fact that when China cracked down on crypto miners, the industry shifted mining to other countries.
China’s push to clamp down on the cryptocurrency market is part of its efforts to meet its goal of being carbon neutral in 2060. Mining for Bitcoin requires a lot of energy, which is one of the reasons China is targeting mining.
China’s Digital Coin Aspirations
China’s clampdown on cryptocurrency comes at the same time that the People’s Bank of China is working on its own digital currency. The country is a frontrunner in the race to launch a digital token among central banks. China is already experimenting with its digital version of the yuan in regions across the country. The digital currency e-CNY is being tested in large cities including Shenzhen, Beijing, and Shanghai.
The cryptocurrency market has been facing increased scrutiny by regulators across the globe. China’s tough stance on the industry is not new, but its sudden move last week raised concerns for some crypto investors.
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