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China’s big announcement made all transactions in cryptocurrency illegal, the price of bitcoin fell

Cryptocurrency: In a major move, China’s central bank on Friday declared all transactions in bitcoin and other such virtual currencies illegal. Along with this, a campaign has been started to ban the use of digital currency in an unauthorized manner. The notice issued on Friday said that bitcoin, ethereum and other digital currencies have disrupted the financial system. It is being used for money laundering and other crimes.

China’s central bank, the People’s Bank of China, said in a notice issued on its website, “Digital currency derivative transactions used as currencies are illegal financial activities and are prohibited.”

Within hours of the announcement, the price of bitcoin fell by more than 9 percent to $41,085. The price of Ethereum declined 10 percent to $2,800. The same has happened with other currencies of this type.

Chinese banks banned the cryptocurrency in 2013, but the government issued a reminder letter this year. This suggests that there is concern at the official level regarding the cryptocurrency. The government is concerned about the damage to the financial system due to transactions using these types of currencies.

Promoters of the cryptocurrency say it offers a degree of privacy and flexibility, but Chinese regulators worry they could undermine the ruling Communist Party’s control over the financial system. It is also said that it can help hide criminal activity. The People’s Bank of China is developing a digital version of the country’s currency, the yuan, for cashless transactions. The government will have complete control over this.

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