What happened? The Chinese government's long-running battle with digital currencies changed dramatically earlier today when the country's central bank announced that all transactions involving cryptocurrency were illegal and should be banned. Bitcoin price dropped from $45,200 to $42,675 in two hours.
The People's Bank of China wrote on its website that not all cryptocurrencies, including Bitcoin and Tetra, are fiat currencies and cannot be distributed in the market. Reuters reported that the People's Bank of China is banning financial institutions, payment companies and internet companies from facilitating cryptocurrency trading and is strengthening monitoring of risks associated with such activities.
Elsewhere, agency said Chinese economic planning needed to mine crypto and crack down on efforts to achieve carbon targets.
In May, the State Council Committee of China, led by Vice Premier Liu Ou, announced that the collapse of virtual currencies would be suppressed as part of efforts to contain financial risks. Bitcoin prices and stop mining activities. It also drove down GPU prices in the country and crypto miners sold their graphics cards. ASRock said at the time that lower demand would reduce the price of graphics cards globally. The legalization of all cryptocurrency transactions in a country that holds up to 70% of the world’s cryptocurrency reserves could have a similar effect.
This is a well-developed story
China Bans All Cryptocurrency Transactions, Bitcoin Price Drops