Finance

Crypto transactions are now illegal in China

China’s central bank said all cryptocurrency-related transactions are illegal, reinforcing the country’s tough stance against digital rivals to government-issued money.

In a statement posted on its website on 24 September, the People’s Bank of China said the latest notice was to further prevent the risks surrounding crypto trading and to maintain national security and social stability.

The price of bitcoin fell as much as 5% following the announcement.

Naming bitcoin, ether and tether as examples, the central bank said cryptocurrencies are issued by nonmonetary authorities, use encryption technologies and exist in digital form and should not be circulated and used in the market as currencies.

It also said it is illegal for overseas exchanges to provide services for residents in China through the internet.

China banned cryptocurrency exchanges from operating within its borders several years ago, but individuals in the country have continued to find ways to trade bitcoin and other digital currencies via over-the-counter or peer-to-peer transactions.

In May this year, a powerful Chinese superregulator pledged to crack down on bitcoin trading and energy-intensive mining, helping to send the price of bitcoin tumbling. Financial regulators in the country have also gotten tougher on banks and payment companies and in June ordered them to take a more active role in weeding out crypto-related transactions.

The statement was dated 15 September but it was only posted onto the central bank’s website at 5PM local time on Friday, 24 September.

Write to Elaine Yu at [email protected]

This article was published by Dow Jones Newswires

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