China effectively bans cryptocurrency and Bitcoin »La Gazzetta di Massa and Carrara


Wednesday, November 17 2021, 4:01 pm

China has further restricted the use of cryptocurrency and Bitcoin for businesses, warning against its use. Industry bodies argued that the volatile price changes mean it “violated the security of people’s property and disrupted the normal economic and financial order.”

China, which is home to over 75% of the world’s Bitcoin mining, where new virtual currencies are minted, financial institutions and payment companies have banned from providing services related to cryptocurrency transactions. The ban covers institutions such as banks and online payment channels and includes any services involving cryptocurrency, such as registration, trading, clearing and settlement.

What exactly has China done?

While it has not yet banned people from holding digital currencies, it has issued a warning against “speculative” crypto trading. In a statement, three Chinese industry bodies said:

“Recently, cryptocurrency prices have skyrocketed and plummeted and speculative cryptocurrency trading has rebounded, grossly breaching people’s property security and disrupting normal economic and financial order.”

China has long moved to restrict cryptocurrency trading. In 2017, China shut down its local cryptocurrency exchanges, shutting down a speculative market that, at the time, accounted for 90% of global bitcoin trade.

Two years later, in June 2019, the People’s Bank of China released a statement announcing that it would block access to domestic and foreign cryptocurrency exchanges, as well as initial coin offering websites, which many new cryptocurrencies were using for trading. launch.

At the time, the bank argued that virtual currencies “are not supported by real value”, that their prices are easily manipulated and that trading contracts are not protected by Chinese law. China was previously accused of manipulating its own currency: under the Trump administration, the United States accused China of manipulating its own currency, amid a burgeoning trade war.

The United States subsequently canceled this label. In the latest move, China made the People’s Bank initial restrictions more widespread. Three industry entities – the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China – have announced that they will not provide cryptocurrency savings, trust or pledge services, nor will they issue cryptocurrency-related financial products. .

Although China has banned cryptocurrency exchanges and initial coin offerings, individuals are still legally able to hold cryptocurrencies. But this could instead be an opportunity for those who want to start investing outside of China, using reliable platforms such as, for example.

The Consequences Of Bitcoin

Bitcoin’s moves have also affected other cryptocurrencies, with Ether, the currency linked to the Ethereum blockchain network, falling 15 percent to $ 2,875.36, while meme-based dogecoin plunged 18 percent, according to the market tracker. Coingecko.

Shares listed in Frankfurt on cryptocurrency exchange Coinbase plunged 6%, having already fallen below their direct listing price of $ 250 earlier in the week.

The decline in cryptocurrencies was triggered last week by Musk’s reversal on Tesla accepting bitcoin as payment. His subsequent tweets caused further confusion as to whether the automaker had lost its holdings of the coin.

The sale was compounded by China’s announcement banning financial institutions and payment companies from providing services related to cryptocurrency transactions. It also warned investors against speculative cryptocurrency trading.

Cryptowatchers predicted further losses in sight, noting that the drop below US $ 40,000 represented a breach of a key technical barrier that could set the stage for more sales.

More importantly, investors could switch from Bitcoin to gold, analysts at JPMorgan said, citing positioning data compiled based on open interest in CME bitcoin futures contracts.

This shows “the steepest and most sustained liquidation” in Bitcoin futures since last October, they told clients, adding, “The picture of the bitcoin flow continues to deteriorate and points to continued downsizing by institutional investors.”

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