Cryptocurrencies and related transactions are now considered illegal in China, the country’s central bank said Friday (Sept 24) in a statement on its website.
The People’s Bank of China (PBOC) stated that the move was necessary for national security and social stability and would protect investors from risks. Bitcoin tumbled 5 percent as the news became public.
China pointed to the illegal activities surrounding cryptocurrency — money laundering, gambling, pyramid schemes — that disrupt the economy. The statement specifically named bitcoin, ether and tether as examples.
“… virtual currency trading hype activities have risen, disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering, seriously endangering the safety of people’s property,” according to the statement.
The new mandate also affects businesses beyond Chinese borders, making it a crime for crypto services operated by overseas exchanges to conduct digital transactions with people in China. The PBOC also indicated that it will collaborate with domestic agencies for comprehensive monitoring.
Read also: Chinese Crackdown Leads To Crypto Slump
Regulators in China have been cracking down on all things tech and for months have been stepping up oversight and regulation of the crypto sector in the country. Chinese enforcers have made it harder to use crypto in the country and repeatedly shuttered crypto mining operations.
There is already a ban on crypto exchanges working within the country’s borders but that law didn’t prevent people from using online methods and peer-to-peer transactions to buy and sell.
The central bank’s statement outlined a five-point approach to monitoring and dealing with crypto-related activities in the country and the surrounding “hype.” It urged all agencies to “strengthen industry self-discipline management” and said that the China Internet Finance Association, China Payment and Clearing Association, and China Banking Association should “advocate and urge member units to boycott illegal financial activities related to virtual currencies.”