China bans all cryptocurrency transactions and declares them illegal

The Bank Central of China has declared illegal the transactions made through any cryptocurrency, including the popular bitcoin and ethereum.

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On Friday, the Central Bank of China resolved that all financial transactions with cryptocurrencies are illegal, a new regulatory measure against this type of commerce. “Commercial activities related to virtual currencies are illegal financial activities,” the Central Bank of China said in a statement in which it said that it “seriously endangers people’s assets.” The price of cryptocurrencies, including bitcoin, has undergone abrupt changes in the last year, in part due to Chinese regulations, which seek to prevent financial speculation and money laundering.

Following a further tightening of regulations by China, bitcoin immediately fell 6%. At 10:55 GMT, it fell 5.5% to $ 42,256, according to data compiled by Bloomberg. In its statement on Friday, the banking institution warns that those who do not respect the regulations will be “investigated for criminal responsibility in accordance with the law.”

The decision prohibits all financial activities related to cryptocurrencies, such as trading in cryptocurrencies, the sale of “tokens” (or vouchers), transactions involving cryptocurrency derivatives and “illegal fundraising.” The Central Bank of China noted that in recent years that “trade and speculation with bitcoin and other virtual currencies has spread, disrupting the economic and financial order, increasing money laundering, illegal fundraising, schemes of pyramids and other criminal and illegal activities. “

This “was seriously jeopardizing the safety of people’s assets,” he said. While the creation and trading of cryptocurrencies have been illegal in China since 2019, this year’s new measures by Beijing warned banks to slow down these types of transactions and shut down much of the Asian country’s vast bitcoin network. . This Friday’s statement from the banking regulator is undoubtedly the strongest signal so far from the Chinese government to stop this digital resource.

Full control over cryptocurrencies

Bitcoin, the world’s most influential digital currency, and other cryptocurrencies cannot be tracked by a country’s central bank, making it difficult to regulate them. Analysts think that China fears the proliferation of illicit investments and cryptocurrency fundraising in the second-largest economy on the planet, which also has strict rules on capital outflow. This offensive against cryptocurrencies also opens the doors for China to introduce its digital currency, which is already in the works, which would allow the central government to control transactions.

Chinese officials said in June that more than 1,000 people were arrested for profiting from criminal activities to buy cryptocurrencies. Several critical provinces of the Asian giant have already banned the operation of cryptocurrencies since the beginning of this year. Bitcoin values ​​fell in May due to a warning from Beijing to investors against speculative cryptocurrency trading.

In total opposition, El Salvador became the first country on September 7 to establish bitcoin as a legal tender on par with the dollar. This currency has governed the economy of the Central American country for 20 years. Ten days later, 1.1 million Salvadorans had the “Chivo” wallet to carry out transactions in bitcoins. This device is an electronic wallet that Salvadorans inside and outside the country can download on their cell phone to carry out transactions in this cryptocurrency.