Bitcoin down by over $3,000 since news broke
China’s central bank confirmed on Friday that all cryptocurrency transactions are now illegal, including Bitcoin.
“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said, adding that it “seriously endangers the safety of people’s assets”.
At present, China is one of the largest markets for crypto in the world, and price fluctuations of cryptos are often caused by moves in the country.
Bitcoin has fallen by over $3,000 following the announcement.
China’s view of crypto is that it is a volatile, speculative investment, in addition to a means of illicit activities.
It has been illegal to trade crypto in China since 2019, however, activity has remained via foreign exchanges.
This year, there has been a robust, widespread crackdown, including a previous ban on mining crypto.
Sophie Skelton Managing Associate, Financial Regulation, Addleshaw Goddard, said: “Crypto is disrupting traditional investments and currencies in a rapidly evolving digital financial services landscape.”
“While we’re unlikely to see a blanket ban on crypto in the UK, it’s vital that the regulation keeps pace with technology to maintain confidence in the financial system.”