The Chinese government has come out once again to crack down on cryptocurrencies, and this time Bitcoin is struggling to maintain its price above $41k.
China Readies Coordinated Crack Down On Cryptocurrencies
The People’s Bank of China has come out today to reveal a coordinated effort that would further crack down on the cryptocurrency activities. The PBoC said Bitcoin, Ether and stablecoins such as Tether (USDT) do not qualify as legal tender in China and cannot be used in the currency market.
This latest development doesn’t come as a surprise to many, as China has a history of cracking down on crypto-related activities in the country. Over the years, the government has banned crypto exchanges from operating in China; it has stopped cryptocurrency mining activities, initial coin offerings (ICOs) were also banned, and every other crypto social event.
The PBoC told financial institutions operating in the country that dealing with cryptocurrencies is illegal, and they will now work harder to crack down on crypto transactions. According to the apex bank, the PBoC, alongside nine other Chinese regulators, including the Cyberspace Administration of China and the Ministry of Public Security, has come up with a coordinated mechanism to stop financial institutions from participating in any cryptocurrency transactions.
The bank said the authorities will are now better equipped to monitor and detect illegal cryptocurrency transactions.
Bitcoin Slips Below The $42k Mark
Bitcoin has been struggling since the start of the week. The leading cryptocurrency and, in fact, the broader crypto market has lost hundreds of billions of dollars, with the bearish sentiment still in play.
Following China’s news today, Bitcoin is down by more than 6% and is struggling to stay above the $41k level. With the current bearish sentiment in play, Bitcoin could likely fall below the $40k mark for the first time since early August.
However, while in the short term, Bitcoin’s price might decline, the cryptocurrency market has always bounced back and performed well after China’s negative news. Historically, Bitcoin has performed excellently in the medium and long-term after any ban on cryptocurrency-related activities in China.
Market experts are still optimistic that Bitcoin could touch the $100k mark before the end of the year as the wave of institutional adoption seen in the market is a sign of greater things to come.
This article was originally posted on FX Empire