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China: Declares crypto-currency transactions as illegal

Ryan Evans
Ryan Evans

Earlier this week, news broke that China's central bank - The People's Bank of China (PBOC) - has announced that going forward all transactions of crypto-currencies shall be illegal. This is seen as somewhat a strengthing measure of their 2019 crypto trading ban.

A spokesperson at PBOC said "Virtual currency-related business activities are illegal financial activities," going on to warn that it "seriously endangers the safety of people's assets".

With the news, big players in the crypto-arena saw massive slumps in their prices. Bitcoin was down as much as 9%, however tapered off at around a 6% loss by the end of the day.

Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, believes that this announcement is a good thing for Bitcoin. "The last thing we want is China [to be] involved in a currency of the world." he said.

Bitcoin wasn't the only crypto-coin to suffer on the day of announcement, with ETH and others slumping heavily.

The announcement by PBOC came a day after Twitter announced that users will soon be able to send Bitcoin to each other, at virtually zero cost, using the Lightning network that has been built on top of bitcoin's primary layer.

PBOC added that any online website, even if not based in China, was to offer these types of services to their citizens, that it would also be performing an illegal activity.

The reaction to this news has been mixed.  Some people see it as a good thing; due to the amount of machine power and energy usage used to 'mine' for coins.  In September 2019, China accounted for over 75% of the worlds Bitcoin energy use. Though, by April 2021, this was down to just over 46%.

What are your thoughts about this latest news? Do you think it's a good or bad thing? Do let us know in the comments.


Ryan Evans

General Manager, HR, Compliance Officer