Stop to support cryptocurrencies: Chinese government orders to Banks

Upcoming auction payment for a pear-shaped diamond which is worth around $15m, could be done in cryptocurrency

China has been able to further expand their clampdown on the world’s currently trending cryptocurrency, and have told all operational banks of the country along with other payment accepting platforms to completely abort the support for digital currency transactions, such as Bitcoin. This news has been made public after the initial order by the Chinese government to shut down the mining operations for Bitcoin that has been going on in the Sichuan province of the country on Friday.

On Monday, it has been observed that the overall value of the cryptocurrency had fallen down by 10%, followed by Tuesday when it even dropped below $30,000. The worth of cryptocurrency, including Bitcoin, has been reported to have suffered from a massive decline of around 50% since it had hit a record high of being at $63,000 in the month of April this year.

The central bank of China, the People’s Bank of China (PBOC), on Monday has stated that they had recently called on several of the payment firms and major banking corporations of the country and had urged them to take strict actions over the trading process of cryptocurrency.

The banks across China have been explicitly telling not to provide any services or products to individuals involved in trade, clearance, and settlement of all transactions of cryptocurrency, as stated by the PBOC.

Restrictions and scrutiny by Chinese Banks

China has become the third-largest lender by its assets, and the Agricultural Bank of China has said that they would now start following the guidelines provides by the People’s Bank of China and would be initiating conductance of due diligence on all of their clients for rooting out of any individuals that might be involved in illegal activities, such as mining of cryptocurrency and all related transactions.

The Postal Savings Bank of China has also given a public statement saying that they would not be facilitating any transactions regarding cryptocurrency.

The online and mobile payments platform of China, Alipay, which is under the ownership of the financial giant technological firm Ant Group, has stated that they would now be setting up a monitoring setup for the detection of any illegal transactions of cryptocurrency.

The most recent security measure has arrived after the concerned authorities in the Sichuan province located in the southwest region of China on Friday have ordered the mining operations of Bitcoin to shut down.

China has been accounted for around 65% of the total production of Bitcoin globally in the previous year amid the first deadly wave of the coronavirus pandemic, and the rating of Sichuan has come on the top second position for being the largest producer of cryptocurrency, majorly Bitcoin, which is confirmed by the data accumulated by the University of Cambridge for research purposes.

Declining value of Bitcoin

In the previous month, the cabinet of China, the State Council has stated that they are going to track down the mining and trading of cryptocurrency as a major part of their recent campaign, which is designed for the controlling of financial risks of the country.

Some of the analysts have given a warning saying that there is a risk of potential fall in the worth of Bitcoin due to the phenomenon of price chart, which is known as the Death cross, which is bound to occur when a short-term average trendline is able to cross below into the long-term average trendline.

Other various cryptocurrencies that are available in the market have also observed a decline in their value as the investors have become worried about the much tighter regulatory measures implemented on to the digital currencies of the world in China.

On a separate note, the auction house Sotheby’s have stated that a very rare pear-shaped diamond which is expected to be sold in a live auction for around $15 million would easily be bought in the upcoming month during the event by using the cryptocurrency, which is something concerning as cryptocurrencies are slowly going under heavy scrutiny and restrictive measures all around the world.

This would be the very first time when a diamond of such large size would be offered to the public in a sale that would be authorized to be done by using cryptocurrency, as previously none of such large amount of money transactions has ever been approved to undergo through cryptocurrency.

Read also Cracks Down On Crypto Currencies By China And Falling Of Bitcoin