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China to tighten regulations on cryptocurrency trading, mining

Anadolu Agency ECONOMY
Published September 24,2021

China's central bank announced on Friday that it will tighten regulation on cryptocurrency activities, including trading and mining, as Beijing intensifies its crackdown on digital coins.

"China's central bank and nine other government departments have jointly released a notice to further forestall and handle the risks related to virtual currency trading and speculation," according to Chinese state-run Xinhua news agency.

"China will step up its crackdown on virtual currency mining as part of the nation's efforts to save energy and cut carbon emissions ... The country will intensify regulation over the whole process of virtual currency mining and strictly prohibit new mining projects," the agency said, adding: "Virtual currency mining is energy-intensive, produces high carbon emissions and contributes little to the economy."

The People's Bank of China's other regulations on the market include prohibiting the trade, token issuance and derivatives for cryptocurrencies.

It will also begin considering overseas cryptocurrency exchanges that offer services to domestic residents in China as an illegal financial activity.

In addition, financial institutions, non-bank payment companies, and internet firms will be banned from facilitating cryptocurrency trading.

The Chinese government's regulations on crypto market have become more common recently.

Beijing announced tighter regulations earlier this year on crypto mining, which led to a decline in Bitcoin's processing power, while some miners in China chose to move their operations overseas.

The People's Bank of China in July ordered a company to shut down over suspicions of providing software to crypto transactions, while Chinese regulators in June increased pressure on domestic banks and payment businesses to abandon providing crypto services.

With the latest moves on Friday, price of cryptocurrencies took another hit.

Price of Bitcoin, world's largest digital coin by market cap, fell to $40,675 at 7.18 a.m. EDT (1118 GMT) before slightly recovering to $41,500 level for a 4.7% loss.

Ethereum, the second largest coin, was down around 10% at the time, while some virtual coins were down as much as 15%, according to official figures.

Total market value of the crypto market declined to $1.81 trillion at the time -- down almost $200 billion, or 9.5%, from $2 trillion in less than 3 hours, according to data by digital asset price-tracking website CoinMarketCap.