In cryptocurrencies, Bitcoin and other digital coins continued to trade lower after China’s central bank reaffirmed a crackdown on cryptocurrencies and restricted trading channels for Chinese residents.
As per Coindesk data, the world’s largest crypto currency plunged around 2% to trade at $31,488. Ether, the second-biggest crypto currency, was also down 2% to trade below $2,000 level at $1,881. Dogecoin prices crashed the most as the digital token fell to $0.18, down more than 16% in the past 24 hours. Other cryptocurrencies like XRP, Litecoin also fell over 10%.
The sell-off was sparked by an announcement from the Peoples Bank of China saying it had summoned China’s largest banks and payment firms urging them to crack down harder on cryptocurrency trading.
Crypto exchanges were effectively pushed out of China by a 2017 rule change, but over the counter (OTC) platforms based-overseas sprung up to act as middlemen, receiving payment from people based in China and buying cryptocurrencies on their behalf.
Last month, three industry associations, which have much less clout than the PBOC, issued a similar ban on crypto-related financial services, but market participants said this will be hard to enforce as banks and payment firms would struggle to identify crypto-related payments.
However, following Monday’s PBOC statement, banks including Agricultural Bank of China and Alipay, the ubiquitous payment platform owned by fintech giant Ant Group, said they would step up monitoring to root out crypto transactions, reported Bloomberg.
Beijing has sharply ratcheted up its campaign against cryptocurrencies in the past few weeks, since China’s State Council, or cabinet, said last month it would tighten restrictions on bitcoin trading and mining.
Major bitcoin mining hubs have started to put this into effect, and authorities in regions including Sichuan, Xinjiang, and Inner Mongolia have issued their own curbs with greater details on the restrictions.
As a result, the hashrate, which measures the processing power of the bitcoin network and shows how much mining is taking place, on Monday hit its lowest level since late 2020.
(With inputs from agencies)
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