China's central bank urged to "stay away" from bitcoin and cryptocurrencies
Transactions involving cryptocurrencies are pure speculation and therefore should be "kept away from", the People's Bank of China is confident. Yin Yuping, deputy director of the Financial Consumer Protection Bureau of the Chinese Central Bank, urged Chinese citizens to "protect their pockets" as bitcoin is not legal tender and has no real value, the Renmin Jibao newspaper said.
"In response to the possible increase in cryptocurrency transactions, the Central Bank will work with relevant departments to identify foreign crypto exchanges and local traders, and block and take action against websites, applications and corporate channels," Yin Yuping stressed.
The People's Bank of China will continue to take strict measures against cryptocurrency transactions. The statement said that if people become aware of illegal digital asset transactions, they should immediately report it to the relevant agencies.
Tough bans on cryptocurrencies began to be imposed in China in the spring, when the National Internet Finance Association, the China Banking Association and the Payments and Clearing Association issued a joint statement. They referred to a Central Bank document "on the need to prevent the risk of a frenzy of transactions involving virtual currencies". The regulator called on financial institutions not to use cryptocurrencies to price goods and services, and to restrict any transactions involving cryptocurrencies.
The list of transactions to be stopped included the purchase of cryptocurrencies, any related investment activity, trading and simply the exchange of digital assets. On May 21, the Finance Committee of China's State Council called for the ban to be extended to mining activities. By the end of June, digital asset mining activities were finally banned in the country.
The authorities' decision led to an exodus of miners from the country. Kazakhstan, the U.S., Canada, Europe and Russia became the most popular destinations. As a result, prices of cryptocurrency mining equipment collapsed in China, forcing Bitmain to suspend its sales.
Cryptocurrency bans in China have put pressure on the crypto market. As a result, the value of bitcoin has fallen by more than 50% from the all-time high of about $65 thousand to $29 thousand. Now the price of the asset is gradually recovering from the fall, as of the morning of August 27, the first cryptocurrency is trading at $47.3 thousand. From the local lows, it has increased by 62%.