The central bank of China stated that all transactions involving cryptocurrencies are illegal. As such they must face a ban, signaling that it is likely to crack down on this domain.
According to Bloomberg News, the People’s Bank of China said that all cryptocurrencies that include Tether and Bitcoin do not fall into the category of fiat currencies and as such cannot go into circulation. It made this statement on its website.
It also went on to say that any kind of transaction that is related to Cryptocurrency like offshore exchanges that extend services to the domestic or residents can be said to be illicit financial activities, as reported by Bloomberg News.
The moment this statement was made Bitcoin slid by as much as 5.5% Friday, which is amidst the ongoing debt crisis of the property developer Evergrande Group. It is also being said that it is quite likely that the Chinese government may respond to signals that miners have disguised their activities so that they can continue staying in the business.
Bloomberg News also reports that the head of the Asia Pacific associated with Luno, a cryptocurrency exchange in Singapore, Vijay Ayyar said that the Chinese government has commented on similar grounds in the past, however, given the current scenario and prevailing environment encircling the Evergrande Group news and by seeing the entire macro-environment, aside from the statements made by SEC, such comments now will trigger a sell-off of risky assets.
The economic planning agency of China also went on to say that it is an urgent requirement for China to do away with crypto mining keeping in mind the carbon goals as well.