China’s central bank has declared that all cryptocurrency transactions are illegal, thus prohibiting digital tokens like Bitcoin.
China has one of the largest cryptocurrency markets in the world.
The global price of crypto-currencies is frequently affected by variations there.
With this move, the Chinese government is stepping up its campaign against cryptocurrency exchanges, which it views as a high-risk, high-return investment, or even a means of laundering money.
“Virtual currency-related business activities are illegal financial activities,” China’s People’s Bank said, adding that it “seriously endangers the safety of people’s assets.”
Those who engage in “illegal financial activities” are committing a crime and will be prosecuted, according to the statement.
It further stated that foreign websites selling such services to Chinese nationals online is unlawful.
China urged banks and payment companies to stop supporting transactions in June, and it outlawed “mine,” the practice of creating new currency using powerful computers.
China has long been one of the world’s key mining centers, thanks to its comparatively low electricity prices and less expensive computer technology.
Trading cryptocurrency has been illegal in China since 2019, but it is still possible to do it online through foreign exchanges.
Following the Chinese statement, the price of Bitcoin dropped by more than $2,000.
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