China continues to take tough measures to ban digital currencies, Bitcoin falls to 2-week low

In its June 21 announcement, the PBOC called on Agricultural Bank of China (ABC), China Construction Bank (CCB) and Industrial and Commercial Bank of China (ICBC), and other payment platforms such as Alipay , discussing the issue of “providing services for speculative transactions of cryptocurrencies.”

The regulator has asked these financial institutions to identify and block all transfers to accounts owned by cryptocurrency exchanges and other foreign intermediaries. In addition, investments in any technology to process transactions related to cryptocurrency investments are also prohibited.

The request is part of the Chinese government’s recent crackdown on cryptocurrencies that began in May. Beijing is seeking to remove all transactions and shut down border mining. of this country. Instead, the central bank wants people to use the digital currency issued by the agency – which is currently being tested on a large scale.

The world’s largest cryptocurrency fell as low as $31,760 on June 21, falling below $32,000 for the first time since June 8, according to data from Coin Metrics. Bitcoin is currently trading around $32,997. More coins like Ether and XRP also plunged, down 11% and 10% respectively.

Bitcoin has now recovered from the intraday lows.

While Chinese authorities have taken the first steps to ban banks from processing Bitcoin transactions since 2013 and have carried out a number of regulatory campaigns since then, they have not been able to completely eliminate the transaction. this translation. Some industry insiders say that cryptocurrency investors in China can still hold Bitcoin through peer-to-peer traders.

Leo Weese, co-founder of the Hong Kong Bitcoin Association, said that to implement the new directive, Chinese authorities and banks can start to slowly monitor and remove bank accounts that use activity. Peer-to-peer transactions to accept payments. He said: “Trading in Bitcoin will continue to be made, but the liquidity will be less and the spread will increase. Investors are limited to transactions only with friends and trusted people.”

Earlier, the PBOC said cryptocurrency trading disrupts the financial system, posing risks of illegal cross-border asset transfers and money laundering. In addition, it also “seriously infringes on the security of people’s property.”

To control capital flows, China has limited the ability of its citizens to move money outside the country and has watched Bitcoin cautiously since the currency became popular almost a decade ago.

Sichuan is a province with abundant hydroelectricity, located in southwestern China. Local authorities ordered 26 Bitcoin mining pools to shut down last week. The request comes after Beijing’s ban was issued, which closed mining areas in Xinjiang, Yunnan and Qinghai.

Even the northern region of Inner Mongolia has set up a hotline for people to report suspected cases of cryptocurrency miners.

Consult the Financial Times; CNBC