On Friday, China’s central bank, the People’s Bank of China (PBOC), declared all cryptocurrency transactions illegal. This is just another entry in China’s recent campaign against cryptocurrency and their growing free market. In the past few months, China blocked the IPO of one of their largest companies, Ant Group; the country banned mining cryptocurrencies, leading to a massive drop in hash rate and migration of miners all over the world; China implemented an extensive crackdown on for-profit private tutoring; and now, China is restating a law from 2013 that states “Virtual currency derivative transactions are all illegal financial activities and are strictly prohibited.”
This isn’t the first time China has put pressure on the crypto market, and it’s not the first time China has outlawed cryptocurrencies altogether. In fact, there have been stories like this out of China 7 times in the past 8 years. When this story came out on Friday, crypto markets dipped roughly 10% but have largely recovered since then, showing China’s influence over the crypto markets has degraded over the years.
Many attribute China’s aggression towards cryptocurrency to the central bank’s development of a virtual Yuan, a state issued cryptocurrency that China can track and regulate.