As China increases pressure on cryptocurrencies, Bitcoin keeps falling

Hong Kong (CNN) Bitcoin has convened a group of major commercial banks in China-including payment giant Alipay-to warn them not to get involved in cryptocurrency and then plunge. According to Coindesk data, Bitcoin plummeted 10% to $31,179 per token, which is the lowest level since January. It rebounded slightly, and the final transaction price fell by 5% to approximately US$33,000 per token, a two-week low. But this is still 50% lower than the historical high in April. Other cryptocurrencies also plummeted: Ethereum fell 8%, while Dogecoin fell 20%, erasing all gains since April. For a number of reasons, cryptocurrencies have experienced difficult months, including concerns about the environmental impact of mining coins and increased government scrutiny. Bitcoin’s terrible run is not over yet This week, cryptocurrencies are receiving a lot of attention from China, and for several weeks, China has been sending out more positive signals to restrict the use of such currencies.

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Lenders include Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Postal Savings Bank of China and Industrial Bank. After the central bank’s announcement, all six institutions stated that no institution or individual may use their platform for any crypto-related activities. Alipay also promised to strengthen its investigation of encrypted transactions on its platform.

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This is not a new policy for Beijing, but it does strengthen the country’s willingness to restrict the use of Bitcoin and other digital currencies. Last weekend, Chinese state media reported that Sichuan, the southwestern province of China, ordered the cessation of all cryptocurrency mining operations and cut off the power supply to many mining facilities. The province is a major mining center, and this is a key step in the process required to put more of these coins into circulation. Although China has not completely banned cryptocurrencies, the regulator announced in 2013 that Bitcoin is not a real currency and prohibited financial and payment institutions from trading with it. At that time, they mentioned the risk that Bitcoin may be used for money laundering, and the necessity of “maintaining financial stability” and “protecting the status of the RMB as legal tender

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The increasing crackdown is also partly to promote the Chinese government-supported digital renminbi program, which the authorities hope to implement in order to control the flow of funds.

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