China’s crackdown on cryptocurrencies has just got tougher.
Starting this week, the People’s Bank of China considers all Bitcoin and digital currency activities illegal. This includes overseas crypto trading platforms which operate and offer their services in mainland China. The bank has also announced another wave of crackdowns on anyone owning, trading, or in any other way using cryptocurrencies and said it has improved its methods of detecting crypto activities.
“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity,” the PBOC said in an official press statement. “Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies.”
Much like the recent ban on cryptocurrency mining, this new, harsher ban has led to another drop in crypto values across the board. Bitcoin’s price has sunk 13%, according to Coinbase, with a 3% drop per every 24-hour period. The price of Ethereum plunged 21%, with every crypto derivative suffering the same fate.
It’s not just the cryptocurrencies that are in the red this week, but crypto exchange stocks, too. The aforementioned Coinbase is down 4%, for example. Riot Blockchain, a Bitcoin mining company, slumped 6%. Basically, any business that deals with crypto in some way is being affected by China’s ban.
In many ways, China has been a global crypto capital. The biggest mining farms were located in China, companies like AliBaba were among the first large enterprises that started accepting crypto payments, and Chinese citizens were avid Bitcoin traders. Subsidized electricity prices helped the country build this vast community, especially when companies like Bitmain came into play, providing more than 60% of all mining rigs for the network. But, since early this year, the Chinese government has been on the quest to put an end to all this.
Whether the crypto market recovers and to what extent, it’s still up for debate.