Cryptocurrencies, China’s final tightening: all transactions prohibited

China is completing its stranglehold on cryptocurrencies by banning all financial transactions in which they are used. Until now, Chinese citizens who wanted to buy cryptocurrency had no choice but to do so only through foreign exchanges: now that door is also closed.

The grip strengthens the hard position adopted by the Beijing authorities, led by the Central Bank, against any hypothesis of digital currency that is opposed to the official one.

“Business activities related to virtual currencies are illegal financial activities,” the People’s Bank of China said in a note dated Sept. 15 but posted on its website only today, ten days later. Cryptocurrencies, the note said, “seriously endanger people’s property,” as well as national security and social stability.

Needless to say, the announcement caused bitcoin prices to drop sharply, which slumped from $ 45,000 by midday to around $ 41,600, down more than 10% from 24 hours earlier. Worse yet, the ether, which fell 17.5% to $ 2,830. But it is the whole list of crypto-currencies that has suffered the blow.

Bitcoin, ether, and tether, a dollar-linked stablecoin, are explicitly cited by the PBOC as examples of agricultural currencies issued by non-monetary authorities, which use cryptographic technologies and exist in digital form: for these reasons, they should not be used in markets as currencies. .

Winston Ferguson

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