China’s central bank has banned virtually all transactions in cryptocurrencies, outlawing digital tokens such as Bitcoin.
It is the latest and most decisive move in China’s domestic crackdown on what it views as a volatile, speculative investment and scapegoat for money launderers.
China is one of the world’s largest markets for cryptocurrencies. Fluctuations there often affect the value of cryptocurrencies worldwide.
China has banned cryptocurrencies since 2019, but its cryptocurrency market continues to flourish online through foreign exchanges.
China’s statement has now made it very clear that individuals involved in “illegal financial activities” commit a crime and face prosecution, as do foreign websites that provide these services to Chinese citizens online.
The technology behind cryptocurrencies relies on many distributed computers to verify and verify transactions on a giant shared ledger called the blockchain. New “coins” are randomly awarded to those who participate in this work – known as crypto “mining”.
China, with its relatively low power costs and affordable computer hardware, has long been a center for bitcoin mining.
In September 2019, China accounted for 75% of global bitcoin energy consumption, though that number has since fallen to 46% as of April 2021.
The price of Bitcoin fell more than $2,000 in the wake of the development.
For more information, view the original story from the BBC.