Bitcoin falls after People’s Bank of China promise to combat cryptocurrency transactions illegal

Bitcoin fell 5% on Friday in half an hour after the People’s Bank of China promised to vigorously fight against transactions in digital currencies, classified by Beijing as an illegal means of payment, in the country’s territory.

According to data from Coindesk, at 08:50 (GMT time) the currency was trading at $ 44,902, but already at 09:27 it reached $ 42,689. Now it sells for around $ 42,500.

This dynamic was also reflected in other digital currencies, causing the drop of ether by 8% and XRP by about 7%.

In its notice, published at 09:00, the central bank of the Asian giant clarifies that the institution considers that digital currencies “are not legal and should not and cannot be used in the market”, so that the transactions that involve them they are also “illegal financial activities.” The bank promises that those linked to these actions “will be investigated, in accordance with the Law” and highlights that it also considers the provision of services to Chinese citizens by foreign crypto exchanges illegal.

The bank reports that it is building mechanisms to suppress the trade in these types of assets. In particular, it indicates that its actions will be coordinated with the State at the level of central ministries and provincial governments. As a result, it hopes to achieve comprehensive monitoring and early warning of digital currency activities.

In May, the Chinese authorities caused a sharp drop in bitcoin by banning financial institutions and payment companies from providing services related to cryptocurrency transactions, while warning investors against speculative operations with digital currencies.

In June, Beijing closed about 26 cryptocurrency mining centers, accounting for 90% of the nation’s cryptocurrency mining capacity.

 

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