China Is Clamping Down Hard On Crypto Trading And Mining Activities

Hassan Maishera
Published: Jun 21, 2021, 10:44 UTC

The People’s Bank of China has asked banks and payment companies to ban crypto trading and mining operations in the country.

Crypto currency background with various of shiny silver and golden physical cryptocurrencies symbol coins, Bitcoin, Ethereum, Litecoin, zcash, ripple

The cryptocurrency market in China has come under heavy pressure in recent weeks, and the government is now working harder to crack down on crypto trading and mining activities in the country.

China’s PBOC Ask Banks Not To Involve In Crypto Operations

The People’s Bank of China (PBOC) has reportedly summoned banks and other payment institutions in the country. In the meeting, the PBOC asked the banks and other payment institutions such as AliPay not to be involved in cryptocurrency operations.

In a tweet by Walter Bloomberg, the central bank had told banks and payment companies to cut payment channels for cryptocurrency trading. This implies that individuals and institutions engaging in cryptocurrency operations would see their accounts disabled by the banks and other payment institutions.

Some banks have already begun taking the recommendation. In a Reuters report earlier today, Agriculture Bank of China (AgBank), China’s third-largest lender by assets, said it would follow the guidelines from the PBOC and clamp down on crypto trading and mining activities. This makes AgBank the first major bank to come out and make a public statement regarding cryptocurrencies.

AgBank said it would intensify efforts to eliminate illegal activities involving cryptocurrency mining and transactions. The bank warned that any client found to be involved in crypto mining or trading operations would have their accounts shut down immediately, and all relationships would be severed.

China’s Authorities Are Serious About Crypto Ban

China has been a tough ground for cryptocurrencies in recent years. The government began by banning crypto exchanges from operating in the country and initial coin offerings (ICOs). This forced exchanges like Binance, OKEx and Huobi to relocate to crypto-friendly countries.

In this latest banning season, the Chinese authorities are targeting cryptocurrency trading and mining activities. Several provinces, most recently, the Sichuan province, have banned mining activities.

The Sichuan province cut electricity supply to 26 Bitcoin mining farms and other smaller crypto miners last week. This has resulted in Bitcoin’s hashrate dropping by 17% over the past 48 hours. It has also affected Bitcoin’s price, with the leading cryptocurrency now trading just above the $32,000 mark on various crypto exchanges.

BTC/USD chart. Source: FXEMPIRE

With the latest wave of FUD from China, Bitcoin risks losing more value, and its price could drop to the $30k region in the coming days.

About the Author

Hassan is a Nigerian-based financial Journalist and cryptocurrency investor.

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