https://safirsoft.com Bitcoin Banned In China Because It Bans All Cryptocurrency Transactions

This step comes at a time when the government is seeking to limit the repercussions of the real estate collapse.

China's crackdown on cryptocurrency intensified today, as the country's central bank declared all cryptocurrency transactions illegal.

"There are legal risks to individuals and organizations involved in trading and trading virtual currencies," the People's Bank of China said in a statement issued jointly with nine other government agencies. According to a report in the Financial Times, even Chinese nationals working abroad were not exempted because the government said they would be "investigated in accordance with the law".

It is likely that China will ban all bitcoin mining operations soon, and bitcoin and other cryptocurrencies will be in the news. Currently, Bitcoin is down 4.5 percent at the time of release and Atrium is down 7.5 percent. The move follows earlier messages from the Chinese Communist Party banning cryptocurrency mining and warning financial institutions not to engage in such transactions. The crackdown on cryptocurrencies comes at a time when Chinese real estate developers are facing liquidity problems that could plague the rest of the economy. And developers have borrowed heavily to ride the wave. But in recent years, the Chinese Communist Party has revitalized the sector after President Xi Jinping said in 2017 that "houses are for living at home, not for speculation." With migration to cities slowing and birth rates dropping, the country is filled with unfinished or unoccupied housing. The Rhodium Group estimates that the market surplus could accommodate up to 90 million people.

Local governments have reduced land sales significantly, by 90 percent compared to last year. Because they rely on land sales to sell a third of their revenue, the loss could have a domino effect and reduce the ability of local governments to repay their $8.4 trillion debt.

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In August, Beijing sought to contain another sector, urging developers to lower debt-to-asset ratios. Real estate companies often have significant influence and sell their debts to build and develop the market and rely on sales to pay off that debt. Evergrande, the country's second largest development company, adhered to the new demands of the Communist Party. Before this matter, he was now in trouble. With property sales declining, Evergrande was unable to generate the cash needed to complete projects. Without completing these projects, he would not have saved money to pay interest and principal on his arrears. The government has banned Evergrande from issuing new bonds to pay off its short-term debt, and the company currently faces a very high risk of failure.

Some observers are comparing the Evergrand crisis to the American Lehman Brothers crisis. The brokerage firm grew abnormally in 2008 at the beginning of the mortgage crisis. Others don't think the League will allow the Evergrande default to create the same multiplier effect, but investors are still afraid. If Evergrande's problems cause a shock wave across the Chinese economy, investors may try to move their money out of China.

Capital Flow

Read More China All this may be leading us to the point where the crackdown on cryptocurrencies continues. The Chinese government has long restricted the flow of foreign capital and prefers that investors circulate it in the country's economy. But controlling cryptocurrencies is more challenging due to their anonymous nature and the relative ease with which they can be converted into other countries' currencies. The suppression of cryptocurrencies in China is not just because bitcoin mining has excessively used up its power, or because it is commonly used in illicit transactions. This is because the Chinese government is likely to recognize the risks posed by the highly influential real estate sector, and try to limit the consequences when reforming. Cryptocurrencies are easily countered.

Bitcoin Banned In China Because It Bans All Cryptocurrency Transactions
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