China Bans Cryptocurrency Transactions Declares It As illegal

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On Friday, Central bank of China, said, that cryptocurrency transactions are illegal, saying such currencies do not have legal tender status and therefore cannot be circulated as currency in the market.

In a statement, the bank said that bitcoin and other virtual currency transactions have disrupted economic and financial order, contributing to a rise in money laundering, illegal fund-raising, fraud, pyramid schemes, and other illegal and criminal activities.

The bank said: Crypto transactions are now considered criminal financial activity in China, and the country will resolutely curb the hype of virtual currency transactions, severely crack down on illegal financial activities and illegal criminal activities related to virtual currencies, protect the safety of the people’s property in accordance with the law, and make every effort to maintain economic and financial order and social stability.

Chinese banks were banned from handling cryptocurrencies in 2013, but the government issued a reminder this year. That reflected official concern cryptocurrency mining and trading might still be going on or the state-run financial system might be indirectly exposed to risks.

According to Bloomberg reports that one major reason for the Chinese crackdown on cryptocurrencies is the amount of energy needed to mine cryptocurrency transactions. China is in the midst of an energy crisis that has already affected many other industries.

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