China bans cryptocurrency transactions

To China, it’s Tuesday.

The Chinese government has announced a ban for all cryptocurrency transactions, for the millionth time. They have also vowed to stop illegal cryptomining in the country.

After this announcement, any form of transaction using cryptocurrency is punishable by law, which also include off-shore and foreign transactions. According to the People’s Bank of China, crypto-related activities will be considered illicit financial activity.

Banning every cryptocurrency is certainly a bold move, as that industry has seen their latest boom yet. Bitcoin, for instance, attracted powerful individuals like Elon Musk. It also had a large effect on the value of Bitcoin, falling down to 8% and a total market value of $41,000 as of 9AM, 24 September in New York. Bitcoin had its peak value of around $60,000 before this happened. Bitcoin and other cryptocurrencies normally bounce back to their original values when they go downhill.

In addition to banning cryptomining activites, the Chinese government also vowed to counter crypto trading for its harmful uses, such as money laundering and fraud. Cryptomining also take a huge toll on energy consumption which they claim could harm the environment.

According to Financial Analysts, the move may have been done because it’s hurting China’s digital currency, which the government wanted to take full control.

China is one of the largest contributors to crypto mining. In a recent report by the Cambridge Bitcoin Electricity Consumption Index., the country had as much as 46% global hash rate as of April 2021. Hash rate is a type of measurement used to compute the computing power used for mining and processing.

Sources: Reuters, Bloomberg (may be paywalled), Bangkok Post