China’s central bank said on Friday that all cryptocurrency-related transactions are illegal in the country, and they must be banned, citing concerns around national security and “safety of people’s assets.” The world’s most populated nation also said that foreign exchanges are banned from providing services to users in the country.
In a joint statement, 10 Chinese government agencies vowed to work closely to maintain a “high pressure” crackdown on trading of cryptocurrencies in the nation. The People’s Bank of China separately ordered internet, financial and payment companies from facilitating cryptocurrency trading on their platforms.
The central bank said cryptocurrencies, including Bitcoin and Tether, cannot be circulated in the market as they are not fiat currency. The surge in usage of cryptocurrencies has disrupted “economic and financial order,” and prompted a proliferation of “money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities,” it said.
The Chinese government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehavior in order to safeguard people’s properties and maintain economic, financial and social order,” the People’s Bank of China said in a statement.
The move has already started to cause panic among some crypto traders, sending the price of bitcoin and several other currencies down. Bitcoin was down 5.5% at the time of publication.
This is not the first time China has declared a crackdown on cryptocurrency-related activities, but until now so many government agencies had not collaborated on such efforts.