China continues against cryptocurrencies. Token rates are down significantly

Although the decision was made on September 15 this year, it was not until Friday, September 24, 2021 that the People's Bank of China published a message in which it emphasized that cryptocurrencies are illegal in the Middle Kingdom. 

The People's Bank of China has once again announced that it is not only impossible to trade in cryptocurrencies in its territory, but also to mine them. In short - all cryptocurrency activities will be a crime that will be punished with full severity. 

“Recently, there has been an increase in speculative transactions, which undermines the economic and financial order, supports illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes and money laundering. (...) Virtual currencies, such as Bitcoin, Ether or Ted, do not have the same status as legal currency - they are illegal and should not be used as currency " - writes the People's Bank of China in a recent communiqué.

What's more, companies offering brokerage in the cryptocurrency world will also be pillaged - despite the fact that until recently they could be legally established and developed, and domestic banks supported such activities. But now it is quite different.

"All entities engaging in criminal financial practices will be held criminally responsible by law." - underlines the PBOC in a press release.

Financial institutions under surveillance

It should also be remembered that such a message from the Chinese central bank should not be treated as, for example, numerous announcements by the Polish Financial Supervision Authority. In this case - in addition to words written on paper - we also have specific actions. 

The Chinese services had already seized and liquidated entire cryptocurrency mines. Investors who previously boasted (e.g. in social media) that they have large portfolios of tokens also had problems. Now it's time for the next steps. A sealed and automated cryptocurrency transaction monitoring system is already in operation to eliminate speculation in this market. All financial institutions are covered. 

Strong declines in the cryptocurrency market

The publication of the message resulted in a sharp sell-off in the cryptocurrency market. Bitcoin it went down from $ 45.200 to as much as $ 40.675, losing up to 14%. Later, although buyers appeared again, the red bearish candle may scare the weaker nerves. Prices of virtually all other cryptocurrencies also fell - both the larger ones and the Ether (10% decrease), as well as almost all other, even the smallest tokens. 

Worse sentiment on the cryptocurrency market also translated into another weak day of Wall Street companies strongly associated with the cryptocurrency business: the cryptocurrency exchange Coinbase was discounted by 4%, investing in Bitcoin microstrategy by 6%, and the mining company Riot Blockchain by 8,5%. In total, 150 billion "evaporated" from the cryptocurrency market. USD. 

It is estimated that around 1,4 billion people in China alone traded or owned cryptocurrencies. 

Digital Yuan - the only legal cryptocurrency

Why is China attacking the cryptocurrency market so hard? We can rely on the next part of the central bank's communiqué, which writes in it that:

"Bitcoin and other virtual currency transactions have dominated in recent years, disrupting the economic and financial order, causing money laundering, illegal fundraising, fraud, pyramids and other illegal and criminal activities, and seriously endangering the security of people's property."

But you can also add two and two, remembering that China is introducing its own cryptocurrency, which is supposed to be a real threat to the US dollar, which is the main means of payment. He is about to take his place in international settlements digital yuan. 

So what are the real goals of the Chinese government? Everyone has to answer this question for himself.