China's central bank, the PboC, is calling on the country's commercial banks to impose tough restrictions on cryptocurrencies, causing a further drop in the value of these digital assets.
Casi todas las cryptocurrencies and digital assets are facing a new drop in value in the markets, following recent statements by the Central Bank of China, the PboC, and some commercial banks in the country that announced new and tough measures to restrict commercial activities with cryptocurrencies.
In a release Recently, the PboC reported that commercial banks and other financial institutions based in the country must stop facilitating transactions with crypto assets and stop providing services to exchange platforms or exchanges of cryptocurrencies already in over-the-counter stores OTC.
China’s central bank met with representatives of the country’s major commercial banks, including Agricultural Bank of China, Industrial and Commercial Bank of China, Construction Bank, Postal Savings Bank, and even China’s Alipay Network, to discuss concerns about security and financial crimes related to crypto assets. According to the PboC, the banking and financial institutions that attended the meeting agreed to implement new protective measures to counter the potential financial risks that may arise from trading cryptocurrencies and digital assets in the country.
The Chinese bank's statement is shaking the markets again and causing another drop in the value of cryptocurrencies, which have lost, on average, 11% of their value in the last 24 hours. The Top 10 cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) y polkadot (DOT) are among the most affected so far.
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China's war on cryptocurrencies
For years, China has not had the most favorable stance on cryptocurrencies. However, its latest attacks on Bitcoin and the crypto industry have sparked fear in many investors and users who participate in the market and who are selling their crypto asset holdings for fear of further repression and a further fall.
The data from CoinMarketCap show that the market fell by about 11,4% in the last few hours, going from a market capitalization of $1,5 trillion to $1,33 trillion at the time of this writing.
Source: CoinMarketCap
The correction in crypto markets also came after new measures announced by Sichuan province against bitcoin and other cryptocurrency miners. To date, the Ya'an Energy Bureau in Sichuan has shut down 26 bitcoin mining farms, causing a drop in the hash rate network and the price of cryptocurrency. Provincial authorities also ordered power plants to cut off electricity to those engaged in cryptocurrency mining.
China says the tough measures imposed on cryptocurrency mining and trading are part of its work plan to protect the environment and to ensure the economic order and financial stability of the nation.
Responding to the PboC's call against cryptocurrencies
So far, the Agricultural Bank of China, Postal Savings Bank and Alipay Network have reported that they will follow the PboC's instructions to restrict trading in cryptocurrencies and digital assets. Specifically, Postal Savings Bank reported which will close bank accounts and block financial products and services for all institutional and individual clients involved in cryptocurrency and digital asset transactions.
For his part, the blogger known as Wu Blockchain The bank reported via its Twitter account that Agricultural Bank and Alipay have announced similar measures, and will begin to impose new rules to prohibit commercial operations with cryptocurrencies from their accounts and banking products.
The PboC hopes that more banking and financial institutions will join its campaign against cryptoassets to reduce carbon emissions into the environment and protect its monetary sovereignty against global digital currencies such as bitcoin. Let us remember that the Asian power is about to issue its own digital currency, called DCEP (Digital Currency Electronic Payment).
Paving the way for the digital yuan
Just 8 months away from seeing the arrival of its central bank digital currency (CBDC), known as the digital yuan or DCEP, many experts agree that China is imposing tough measures against bitcoin to pave the way for its future sovereign digital currency.
Unlike Bitcoin, the DCEP is a digital currency that is completely controlled by the Chinese government, which guarantees it control over the transactions and commercial operations that each citizen will carry out with said currency. In other words, China will be able to know the financial movements that any citizen makes to pay for products and services in the nation with the digital yuan.
This currency, which has been in development for about 6 years, has seen impressive momentum since Facebook announced its intentions to launch a private and global digital currency. When the social media company with more than 2 billion active users revealed its intentions, it put several governments around the world on alert, including that of China. From there, it can be concluded that the nation will do what is necessary to defend its monetary sovereignty and technological leadership, and that it will clear the way to turn its national currency into one of international scope.
In recent months, China’s government has been giving its digital currency a major boost while implementing tough new measures to restrict the use and trade of bitcoin. China has been handing out millions of dollars worth of digital yuan to its citizens through raffles and lotteries, implementing payments in businesses, shops and even subway services with the digital currency, installing a complete network of ATMs that support the future currency and much more.
The digital yuan is scheduled to be launched next February, during the 2022 Winter Games in Beijing.
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