China bans Bitcoin mining and trading

Under the chairmanship of Vice Premier Liu He, during a meeting of the Financial Stability and Development Commission of the State Council of China, it was announced that Bitcoin mining and trading would be banned. Chinese authorities also vowed to control illegal activity in the stock market, as well as maintain the stability of the stock, bond and foreign exchange markets.

The announcement comes just days after China tightened its ban on banks and payment companies that provide money-related services. According to Reuters, Vice Premier Liu He is the highest-ranking Chinese official to publicly order a “suppression” of Bitcoin, and this is also the first time the Chinese government has targeted cryptocurrency mining activities directly.

Bitcoin as well as cryptocurrencies immediately dropped in price after the statement from Chinese authorities. Bitcoin is currently trading at more than $37,000.

Before the statement made during the meeting of the Financial Stability and Development Commission of the State Council of China, on Friday, CCTV also warned of so-called “systemic risks” system” of cryptocurrency transactions.

“Bitcoin is no longer an investment tool to avoid risk. Instead, it is a tool of speculation,” CCTV emphasized.

CCTV added that cryptocurrencies are often used in black market transactions, money laundering, arms smuggling, gambling, drugs, etc.

According to Reuters, cryptocurrency mining is big business in China, with an estimated 70% of the world’s cryptocurrency supply coming from China. Although, some say that number has decreased in recent years.

“Movements from China will have profound effects on the global cryptocurrency market,” said Winston Ma, a professor at NYU Law School and author of “Digital War.”

Digital Yuan

According to CNBC, the recent tough statements to the cryptocurrency market are seen as paving the way for a digital renminbi issued by the country’s central bank and backed by the renminbi.

In addition to China, the US Federal Reserve on Thursday also said it will soon release a paper outlining its own research into the area of ​​central bank digital currencies.