China has banned three of its government-backed organizations from trading in Bitcoin. This marks another blow for the cryptocurrency, whose price slumped to around $34,000 on Wednesday.
Anyone that chooses to ignore the order will be on their own if they incur losses.
Beijing said in a statement that the coin’s sudden hikes and drops in price were hurting the economy, posing a risk to people’s property. To remedy that, China has put a firm stand by involving the following government-backed firms:
- The China Banking Association
- Clearing Association of China
- The National Internet Finance Association of China
This means no more registration, trading, clearing, settlement, saving, or pledging by the institutions.
The state also warned its citizens that they were on their own should they incur any losses.
China’s Crackdown on Bitcoin Continues
China has now joined the list of countries saying no to Bitcoin. It banned its use in 2019, but the Chinese people have always found their way around its trading by using the online avenue.
In 2017, the Chinese government also closed its crypto exchanges which accounted for 90% of the trading at the time.
China attributes its use to financial disruptions in its economy. It further added that it violated people’s asset safety with its price constantly skyrocketing and then plummeting.
Latest Setback for Crypto
China’s move comes after Bitcoin saw its price fall to around $34 000 earlier this week.
Even altcoins like Dogecoin and Etherium have felt the heat by losing 24% and 22%, respectively.
In March 2021, Elon Musk. Tesla’s founder and CEO endorsed Bitcoin for use in purchasing electric cars. Barely two months later, he stopped its use, citing environmental concerns.
The currency requires tons of energy to mine, which can be costly. Miners resort to coal use as a cheap source of fuel. The downside is that coal is hard on the environment.
Bitcoin’s drop in price has also affected Tesla’s shares on NASDAQ. They fell by 3% that same day.
Bitcoin’s future is uncertain, given that China does 75% of the mining. It also controls 60% of the hash rate.