July 2, 2022
  • July 2, 2022

Bitcoin collapses after China steps up cryptocurrency crackdown

By on September 24, 2021 0

By Shawn Deng and Chris Liakos, CNN Business

China is stepping up its crackdown on cryptocurrencies.

Chinese government agencies, including the country’s securities regulator and the People’s Bank of China (PBOC), said in a statement Friday that all cryptocurrency-related business activities are illegal and have committed to crack down on illicit activities involving digital currencies.

The agencies said overseas crypto exchanges would be prevented from providing services to Chinese residents through the internet.

Bitcoin fell about 5% on the news. Ethereum, another leading cryptocurrency, fell 9%.

The agencies said China would develop “new systems” to counter the risks posed by cryptocurrencies. China will gradually begin to shut down its crypto mining operations, and no new mining projects will be authorized, the National Development and Reform Commission said in a separate statement.

The announcements are the latest in a series of strict measures from China on cryptocurrencies.

In May, Chinese Vice Premier Liu He told a group of finance officials that the government would “tackle bitcoin mining and trading activity” as part of its goal of achieving financial stability. And financial and banking watchdogs have said that financial institutions and payment companies should not participate in any cryptocurrency-related transactions, nor should they provide crypto-related services to their customers.

The measures are not only aimed at reducing financial risk. The computers needed to mine bitcoin consume a ton of computing power and electricity, raising concerns about the cost to the environment.

China was on track to generate more than 130 million metric tonnes of carbon emissions by 2024, according to a study by Nature Communications. This is more than the total annual carbon emission production of the Czech Republic and Qatar in 2016.

This kind of outcome is also disastrous for China’s ambitious climate plans. President Xi Jinping has pledged to make his country carbon neutral by 2060, and the country is already struggling to contain carbon emissions from other industries.

– Laura from CNN Business He contributed to this report

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