China’s central bank declared on Friday that all cryptocurrency-related transactions are illegal in the country and must be prohibited, citing national security and the “safety of people’s assets.” The world’s most populous country also stated that foreign exchanges are prohibited from providing services to its citizens.
Ten Chinese government agencies pledged in a joint statement to maintain a “high pressure” crackdown on cryptocurrency trading in the country. Separately, the People’s Bank of China barred internet, financial, and payment firms from facilitating cryptocurrency trading on their platforms.
The central bank stated that cryptocurrencies, such as Bitcoin and Tether, cannot be traded because they are not fiat currency. The increased use of cryptocurrencies has disrupted “economic and financial order,” leading to an increase in “money laundering, illegal fund-raising, fraud, pyramid schemes, and other illegal and criminal activities,” according to the report.
Offenders will be “investigated for criminal liability in accordance with the law,” the central bank warned.
The People’s Bank of China said in a statement that the Chinese government will “resolutely clamp down on virtual currency speculation, as well as related financial activities and misbehavior, in order to safeguard people’s properties and maintain economic, financial, and social order.”
The move has already caused some crypto traders to panic, causing the price of bitcoin and several other currencies to fall. At the time of publication, Bitcoin was down 5.5 percent.
China, which is home to some of the world’s largest crypto mining services, is also pursuing those firms. The National Development and Reform Commission announced a nationwide cleanup of cryptocurrency mining, calling the task “imperative.”
This is not the first time China has declared a crackdown on cryptocurrency-related activities, but until now, so many government agencies have refused to work together on such efforts.
For several years, Chinese regulators have been considering a ban on cryptocurrency mining. However, in recent months, several local businesses have begun to embrace cryptocurrency. In March, Chinese app maker Meitu paid $40 million for Bitcoin and Ether.
Some people are optimistic. Vijay Ayyar, the head of Asia Pacific business at Singapore-based crypto exchange Luno, stated in a tweet that “China has banned crypto more times than one can count.”