China bans finance firms from servicing Bitcoin transactions

Bitcoin entered below $ 40,000 for the first time in more than three months on Wednesday after China said cryptocurrencies would not be allowed to trade and warned investors of speculative trading in it.

The comments sent the unit saying it had sunk more than 10 percent and hit another one after being hit by the opinions of wealthy Elon Musk and his car company Tesla.

Trading cryptocurrencies has been banned in China since 2019 to prevent money laundering as leaders try to prevent people from exchanging money overseas. The country accounted for about 90 percent of global trade in the sector.

In a statement, three government-sponsored industry organizations – the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China – said “cryptocurrency prices have risen sharply and declined, and speculative cryptocurrency trading activities have returned”.

The fall in price has “seriously violated the security of human property and disrupted normal economic and financial order”, said a statement, posted on social media by People’s Bank of China.
The notice warned consumers of wild speculation, adding that “losses caused by investment activities are borne by consumers themselves”, because Chinese law does not provide protection to them.

It also emphasized that the provision of cryptocurrency services to customers and crypto-based financial products was illegal for Chinese financial institutions and payment providers.

Bitcoin fell on Wednesday from $ 45,600 to $ 39,240, the lowest since the beginning of February, and is at the highest level of $ 64,870 seen recently last month. Analysts have warned that it could drop to $ 30,000.

“This is the latest chapter in China to tighten the noose around crypto,” said Antoni Trenchev, co-founder and co-founder of London-based crypto lender, Nexo.

And Adam Reynolds, of Saxo Market, added: “It’s not surprising to me, as Chinese monetary regulators can be challenged by the purchase of cryptocurrency in the country and transfers to the country.

“So avoiding spending them on the country is important in maintaining financial control.”

Bitcoin has had a few difficult days. It took a turn for the worse earlier this week after Musk’s revelation that Tesla was planning to sell its major units for the unit. And that comes just days after the electric car giant said it would stop using it for commercial purposes due to environmental concerns.

China bans finance firms from servicing crypto transactions

China bans banks from Bitcoin transactions

China has banned its banks from managing Bitcoin transactions, after a huge demand for Chinese investors helped drive 5,000 percent discount on the most visible currencies this year. Beijing stopped the illegal withdrawal of Bitcoin and claimed that people were free to buy and sell it at risk, but highlighted what it said were the risks associated with it, including money laundering and crime. The country operates about one-third of Bitcoin transactions worldwide and BTCChina became the largest Bitcoin exchange in the world by volume trading last month.

“While there are people who call it ‘money’, it is not issued by financial authorities, it does not have financial resources such as legal capacity and enforcement capabilities,” China’s largest bank said in a statement.

“Given its nature, Bitcoin is a kind of visual product. It has no legal monetary value, and it cannot and is not even allowed to circulate in the market as money. ”

China is in the midst of a massive campaign to control its fintech industry, and its major players – including Alibaba and Tencent – have been heavily fined after being found guilty of independence.

The central bank also wanted to promote its own highly regulated digital yuan, which is testing it nationwide on driving systems.

Consumers are already making extensive use of mobile and online payments, but the digital yuan could allow a central bank – rather than big tech giants – big data and payment controls.


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