Majorly unfortunate news has hit the cryptocurrency world today as China has taken a firm stance on use of digital currencies. The People’s Bank of China has made all cryptocurrency transactions illegal, essentially banning cryptocurrency transactions in the country, as well as foreign services engaging in use of cryptocurrencies with Chinese citizens. Bitcoin and other cryptocurrencies saw a notable drop in valuation following the announcement.
The People’s Bank of China made the short, but impactful announcement on its website in the wee hours of September 24, 2021. According to the announcement (roughly translated), the state-backed financial institution has echoed the sentiments put forth by the Chinese government about security concerns regarding cryptocurrency in previous months. Where it was banned in financial institutions in the country already, this latest move effectively makes cryptocurrency transactions illegal and prosecutable in the country now, which is an even more drastic step up from simply not allowing its use in banking transactions. Following the announcement, Bitcoin took at least a 5.6 percent drop in valuation (as seen on Coinbase). It has waffled between $40.7k and $42.6k USD from the $45.1k it started at when the dip occurred. Other cryptocurrency valuations have seen drops as well.
China has not been quiet about its concern regarding cryptocurrency over the last months and it coincides with the government’s crackdown on cybersecurity, as well as it strict regulation of gaming. The government had previously signaled its intent to crack down on cryptocurrency as well.
It could cause a major shift in both the cryptocurrency mining and technology scene as China’s cryptocurrency miners make up a large portion of the generation of various units such as Bitcoin. Cambridge University published a report in April 2021 that suggested China was responsible for around 46 percent of overall Bitcoin mining. As big as that sounds, China has actually dropped its overall production in cryptocurrency since prior reporting.
With an altogether ban on cryptocurrency transactions in China, it’s unlikely that Bitcoin, Ethereum, and further cryptocurrency will overcome the impact of the ban soon. Nonetheless, we will continue to monitor the topic for updates and changes.
TJ Denzer posted a new article, People's Bank of China bans all cryptocurrency transactions
Oh no, my Doge!
Good. Finally. Took long enough.
Crypto is a waste anyway you look at it.