China declares all cryptocurrency transactions illegal, causing Bitcoin prices to fall

China Cryptocurrency
Posted at 7:43 AM, Sep 24, 2021

BEIJING — China's central bank has declared all transactions involving Bitcoin and other virtual currencies illegal, stepping up a campaign to block the use of unofficial digital money.

Chinese banks were banned from handling cryptocurrencies in 2013, but the government issued a reminder this year. That reflected official concern cryptocurrency mining and trading might still be going on or the state-run financial system might be indirectly exposed to risks.

The central bank complained Bitcoin, Ethereum and other digital currencies disrupt the financial system and are used in money-laundering and other crimes.

The People's Bank of China is developing an electronic version of the country's yuan for cashless transactions that can be tracked and controlled by Beijing.

China's ruling on Friday caused the price of Bitcoin to fall sharply overnight. The cryptocurrency has lost about 5% of its value in the past 24 hours, according to Coinbase. Ethereum has fallen further, losing about 8% of its value over the past 24 hours.