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published photo, Reuters
Chinese ruling means ban all digital currencies, including Bitcoin
The Chinese Central Bank has announced that all transfers using digital currencies will be illegal, meaning all digital currencies, such as Bitcoin, will be banned.
A statement issued by the People’s Bank of China said that “virtual currencies and related financial and economic transactions are illegal” and added that they “seriously threaten the savings of citizens.”
China is one of the largest cryptocurrency markets in the world; The price of Bitcoin fell by around two thousand US dollars after the new announcement.
The move is the latest in China’s crackdown on digital currencies, which Beijing sees as a volatile speculative investment at best, and a means of money laundering at worst.
China has officially banned cryptocurrency trading since 2019, but allowed foreign remittances to continue using it.
Several Chinese institutions have warned cryptocurrency buyers that they offer no protection for transactions with bitcoin or any other cryptocurrency.
This comes at a time when the Chinese authorities are putting more pressure on this sector.
About 3 months ago, the Chinese government informed banks to stop facilitating transfers using digital currencies and banned their mining operations. Mining requires the use of powerful computers and huge amounts of electrical power to obtain new digital currencies.
Today’s decision is the latest indication that China is firmly prepared to wipe out the cryptocurrency industry, in all its forms.
The government statement makes it clear that anyone involved in “illegal financial activities” is committing a crime and will be prosecuted.
China also considers foreign websites that sell cryptocurrency to citizens illegal.
Cryptocurrency mining
Cryptocurrency mining technology depends on linking a large number of powerful computers, to work together to confirm and examine numbers and symbols and convert them into a common system known as “Blockchain” .
In return, digital currencies are sent randomly to the owners of these devices, in exchange for the use of their computers, in what is known as digital mining.
Known for its electric power and cheap computers, China has always been the world’s largest digital mining center.
Digital mining has become so popular in China that game store owners around the world are blaming Chinese authorities for a shortage of high-powered video cards for mining.
In 2019, China consumed 75% of the energy in the world, in bitcoin mining, and the proportion has fallen to 46% this year, due to the campaign launched by China on the sector.
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