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Central Banks

Bitcoin price plunges after news that China is banning crypto transactions

24 Sep 2021 : 12:39
2 min read
  • China's central bank announced in a memo that it will ban all cryptocurrency transactions
  • The notice also states that offering crypto-derivatives trading services in China is also an illegal business
  • another document explained that cracking down on crypto mining will be part of the provincial government's annual performance metrics

The bitcoin price has fallen back below $45,000 after China’s central bank announced in a memo that it will ban all cryptocurrency transactions.

New rules target OTC services that are still available in China

On Friday, China’s central bank announced that all services that allow fiat currencies to be exchanged with crypto assets or between crypto-assets themselves will now be treated as illegal activities. The PBoC originally released the memo on Sept. 15 but posted it online today.

This treatment targets over-the-counter services still available on Huobi, OKEx, and Binance that allow Chinese users to exchange their fiat yuan for crypto assets to participate in crypto trading activities.

The notice also states that offering crypto-derivatives trading services in China is also an illegal business, even for foreign exchanges that provide the service to Chinese citizens. However, it is unclear whether Huobi, OKEx, and Binance will stop their OTC services.

Crypto mining is also a target again

The National Development and Reformation Commission, China’s central macroeconomic planning agency, issued a separate document this month stating that cracking down on crypto mining is part of the provincial government’s annual performance metrics.

The move is aimed at making the crackdown on crypto-mining a systematic and ongoing effort. The reason behind this announcement is that even though many Chinese miners have left the country, there is still a group of so-called “stealth miners” active in China.


About Author

Stan Colenbrander

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Stan is the head of news and podcast host at Cryptonary. He was formerly a member of the Cryptonary Pro community. In early 2021, he decided to drop out of journalism school at university to pursue journalism in real life and make an impact in the crypto space. . His areas of interest include the NFT industry, decentralised finance, and crypto start-ups.

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