China says all crypto activities are illegal in the country

Country vows for solid crackdown and wants to ‘wipe out’ currency mining with strict regulation

Through a Q&A posted on their website this Friday (Sep. 24) and announced through several media outlets, the People’s Bank of China declared all cryptocurrencies-related activities such as trading, order matching, token issuance and derivatives for virtual currencies, are considered illegal. It also applies to foreigner exchanges operating in the country. 

China’s central bank positioned itself against cryptos again, this time vowing to a solid crackdown on the crypto market. But it’s definitely not the first time that they issued strict statements on the matter. 

Back in the beginning of 2021, there was a crackdown on crypto mining activities in Beijing, forcing mining companies to migrate to places like Texas and Kazakhstan. 

According to the news agency Reuters, “the National Development and Reform Commission (NDRC) said it was launching a thorough, nationwide cleanup of cryptocurrency mining”.

The NDRC also added those activities “contribute little to China's economic growth, spawn risks, consume a huge amount of energy and hamper carbon neutrality goals, it said”.

“It's an "imperative" to wipe out cryptocurrency mining, a task key to promoting high-quality growth of China's economy”

 -NDRC in a notice to local governments

Going in the wrong direction

However, China’s movement seems to go to the extreme opposite of economical growth for people when it comes to considering the cryptocurrencies’ policies. 

The decentralized system provides an environment of freedom, less bureaucracies and more opportunities for life-changing outcomes. 

In this particular case, if we look back at China's historic political positioning, it makes sense that all those possibilities for financial growth without government intervention may seem not a good idea for the country. 

However, early investors really thought at first that it would be otherwise since China is growing technologically and developing economically really fast through the years. 

The official argument to wipe out crypto-related activities revolves around the safety issue. Nevertheless, that is not what most people believe it is. 

“China government says that crypto is used for illegal activities. They forget to mention that gold and fiat are financing illegal activities as well for a long time. The current financial system is modern slavery ruled by banks and governemts”.

-Dio Ianakiara, CEO of Klever

Unfortunately, China’s FUD has consequences in the market. According to Coin Metrics data, the price of bitcoin dropped 3% in 24 hours and Ethereum, the second-largest digital asset, fell 7%.

Even so, the first blow may get softer within the passing time as it did before with China’s positioning on crypto mining. 

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