The Chinese regime seeks to attest its coup de grace to the use of cryptocurrencies

The statement by the People’s Bank of China (BPC) that all activity related to cryptocurrencies, including transactions, mining and advertising, is “illegal and criminal”, he raised speculation on whether these currencies, which fell after the announcement, will permanently stop working in the Asian country.

Friday afternoon the central bank and nine other government institutions – including the internet regulator or the ministry in charge of intelligence work – indicated in a press release on “illegal and criminal” activities generated by “Virtual currency transactions”.

Regulators specifically targeted money laundering, illegal fundraising, fraud or pyramid schemes, ensuring that this type of crime committed with cryptocurrencies They “seriously endanger” the properties of citizens.

The BPC specifically mentioned Bitcoin and Ethereum, as well as others “Virtual currencies issued by non-monetary authorities”, to recall that their status is not the same as that of legal tender currencies and that, consequently, “They cannot circulate in the market as currency”.

The document also calls on the country’s local authorities to “strengthen surveillance” in order to prevent and eliminate “the risks of speculation”.

After the news, bitcoin fell 8.6% and ethereum fell 9.27%, falls which, in the hours that followed, were moderate to about 6% in both cases.

The umpteenth ban

This is not the first time that the Asian giant has declared cryptocurrencies illegal or banned their use or mining due to the excessive use of energy it requires.

Experts in the sector cited by the specialized portal Counter claim that it is, at a minimum, the seventh time Beijing has cracked down on virtual currencies like bitcoin since 2013.

“Even though every time that happens, the markets react with lower prices, the effect is smaller and shorter. For that, The story “China bans bitcoin” already has almost the same status in the communityExplained the CEO of the cryptocurrency hedge fund ARK36, Ulrik K. Lykke.

For his part, the analyst Vijay Ayvar de Luno, a major London-based cryptocurrency exchange, was optimistic, tweeting from Singapore that China has banned these currencies “more times than can count”.

Although the Chinese position is not new, it serves as a warning to sailors: “That was enough to divert the markets into negative territory. Investors had already shown their nervousness since the US Securities and Exchange Commission (SEC) took a harder line on cryptocurrencies, ”he said.

Other analysts point to a change from previous measures taken by Beijing: “Latest clarifications suggest that those involved (in cryptocurrency transactions or mining) are now at risk of prosecution.”, a point Craig erlam, market analyst at the foreign exchange agency Oanda.

“Offenders will be investigated for their criminal liability in accordance with the law”, the BPC warned in this regard in its press release.

The bank has announced that it will take “tough measures “against” speculation in virtual currencies and related financial activities “, although it is pending how the laws will be applied to suspected violators.

Minimizing financial risks, Beijing’s argument

It also remains to be seen how government agencies collaborate in “efforts” to end the use of virtual currencies, bearing in mind that last May the Chinese regime has already banned financial institutions and other companies in the sector from offering services for this type of transaction.

A month later, several regions in China suspended cryptocurrency mining operations at the regime’s request, citing concerns about its high electricity consumption and pollutant emissions from its production.

Since, many Chinese “miners” – who have come to control over 65% of the world’s computing power dedicated to obtaining bitcoin– who settled in regions where electricity was cheap have has chosen to relocate its activities abroad.

As reported by the local press at the time, others with smaller scale operations chose to sell their machines.

Beijing argues that the ban is necessary to “Maintain economic, financial and social order”: Not in vain, the campaign is part of the plan to reduce the financial risks of the regime which, let us remember, has planned to launch its own “digital yuan” -a digital currency, yes, but the objective of which is not to decentralize but precisely to increase the control of the BPC over the money supply – early 2022.

(With information from EFE)

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