China bans cryptocurrency transactions
Finance International Latest

China bans cryptocurrency transactions

The Central Bank of China has banned the trading of cryptocurrencies (virtual currencies) such as Bitcoin, Ethereum, Ripple and Light coin. The announcement is part of a move to stop the use of unauthorized digital currencies. Immediately after China made this announcement, the price of Bitcoin stood at 41,000, down 6 percent. Ethereum has also dropped.

The Chinese government recently imposed restrictions on bitcoin transactions. The cooperation of foreign financial institutions in cryptocurrency transactions of mainland investors is prohibited. After that incident, the price of Bitcoin started falling. Besides, prices of other cryptocurrencies have also declined.

In 2013, cryptocurrency was banned for Chinese banks. Earlier this year, Chinese authorities announced tightening restrictions on cryptocurrencies. After that announcement, a large number of digital currencies were sold by the country’s cryptocurrency traders. However, officials were concerned about the ban.

In a notice on Friday, The People’s Bank of China said, “Bitcoin, ethereum and other digital currencies are disrupting the financial system and being used for other crimes, including money laundering.” All transactions related to virtual currency are illegal in financial activities and transactions through it are strictly prohibited.

According to the British daily Guardian, the central bank decided not to weaken the ruling Communist Party’s control over the financial system. In addition, the People’s Bank of China is working on the electric version of the Chinese currency, the yuan. With which transactions can be done and control will be in the hands of Beijing.

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