China is seriously considering banning cryptocurrencies - Bloomberg

The Chinese authorities, consistently fighting cryptocurrency, are moving to decisive measures in this direction, writes Bloomberg.

On September 24, the People's Bank of China announced that all cryptocurrency-related transactions are considered illegal financial activities. Almost immediately, China's largest bitcoin exchange, Huobi, stopped registering new users from mainland China.

Huobi today released a statement saying that the exchange will delete all existing user accounts from mainland China by December 31st.

And although the Beijing ban is the latest in a series of harsh statements by the Chinese regulator in this direction, analysts note that this time the PRC has moved from words to deeds.

“While this is not a surprise, since China has repeatedly “banned” cryptocurrencies in the past, there is no ambiguity this time around. Crypto transactions and crypto services of any kind are prohibited in China. There is no room for discussion. No gray area,” Anri Arslanyan, Head of Cryptocurrency at PricewaterhouseCoopers, tweeted.

In addition to the People's Bank, nine other government departments, including the Ministry of Public Security, published a statement on the ban on cryptocurrency transactions. Thus, responsibility for violation can follow from several sides at once.

In addition, the ban includes the ability to hire Chinese citizens in offshore exchanges for positions ranging from marketing to technology.

On Friday, Bitcoin fell 8.9% to $40,700, but it managed to offset the fall over the weekend. As Bloomberg notes, previous attempts to ban cryptocurrencies were often followed by an increase in the price of bitcoin.

In June, Chinese Vice President Liu He called for tighter regulation of mining and crypto trading (which was followed by real restrictions). a ban on mining In July, a state-owned energy company introduced .

Many miners have already left China, which as of April accounted for 46% of the world's hashrate, the amount of computing power used to mine bitcoin. From May to July, this figure fell by almost half.

However, until the possession of cryptocurrency in China is not recognized as illegal, it remains not entirely clear how effective the ban on financial transactions will be.

It is clear that personal transactions will lose the status of legal protection, Bobby Lee, the founder of the company Ballet, which provides services for the storage of crypto-currencies, told Bloomberg.

Huobi customers will have to set up accounts with other exchanges before the end of the year unless they follow suit. Nevertheless, loopholes for owners of cryptocurrencies remain, notes Anri Arslanyan. In particular, it will be difficult for China to close access to DeFi platforms, control over-the-counter trading, or prohibit citizens from buying cryptocurrencies while in other countries.