China’s top regulators intensified a crackdown on cryptocurrency trading on Friday, vowing to ban all crypto transactions and crypto mining nationwide. The news hit Bitcoin and other major digital coins, pressuring crypto and blockchain-related stocks.
The People’s Bank of China (PBOC) said cryptocurrencies must not circulate in markets as traditional currencies, adding that overseas exchanges are barred from providing services to mainland investors via the Internet. It has also barred financial institutions, payment companies, and Internet firms from facilitating cryptocurrency trading.
China’s decision to crackdown on cryptocurrency comes after it vowed in May to crack down on Bitcoin trading and mining as part of efforts to fend off financial risk, sparking a major sell-off of cryptocurrencies.
Following the news, Bitcoin, the world’s largest cryptocurrency, dropped more than 6% to $42,2167. The coin had earlier been down about 1%.
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Less popular coins, which typically rise and fall in tandem with Bitcoin, also dropped. Ether fell 10% while XRP fell a similar amount.
The move also hit cryptocurrency and blockchain-related shares.
U.S.-listed miners Riot Blockchain, Marathon Digital, and Bit Digital fell between 6.3% and 7.5% in premarket trading. China-focused SOS shed 6.1% while San Francisco crypto exchange Coinbase Global slipped 3.4%.
The move aims to clean up cryptocurrency mining in China, which according to the National Development and Reform Commission (NDRC), contribute little to China’s economic growth, spawn risks, consume a huge amount of energy, and hamper carbon neutrality goals.
Cryptocurrency mining had been a big business in China before a crackdown that started earlier this year, accounting for more than half of the world’s crypto supply.
