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PBoC Combats Crypto Exchanges and Bitcoin Drops 10%
November 22  |  3 min read

PBoC Declares War on Crypto Exchanges, Bitcoin Price Drops 10%

The COIN360 Editorial Team

The People’s Bank of China published a statement today announcing that they would increase supervision to fight illegal virtual currency activities in the country, and the price of bitcoin dropped to around $7,000 following the announcement. The price of ETH, XRP and other cryptocurrencies was also affected by the statement.

Bitcoin Price Chart on COIN360

According to the statement, relevant financing entities performing “illegal sale of tokens, illegal issuance of securities and illegal fund-raising,” among other things, have disrupted the country’s economic and financial order, bringing risks such as prices skyrocketing.

In September 2017, the PBoC issued, alongside seven ministries and commissions, the “Announcement on Preventing the Risk of Subsidy Issuance Financing”, by which they banned ICOs and cryptocurrency exchanges in the country, clearing up the ICO and virtual currency trading venues performing domestic virtual currency transactions. Since then, supervision of virtual currency trading services to domestic residents has been strengthened.

Furthermore, the Shanghai Financial Stability Joint Conference Office and the Shanghai Headquarters of the People’s Bank of China “will continue to implement the requirements” established by the September 2017 Announcement and will monitor virtual currency business activities to dispose of them immediately and before they occur. Additionally, “ICOs and virtual currency trading services offered to domestic residents through the deployment of overseas servers” are encouraged to be reported to the public security.

According to the statement, which was published after an increase in trading activity in the country allegedly due to China’s public endorsement of blockchain technology, speculations regarding virtual currencies have affected their prices, disrupting “the economic and financial order.” China’s President Xi Jinping promoting the use, development, and adoption of blockchain technology has played a part in speculative signs of rising of virtual currency. After Jinping stated at the end of October that blockchain must be taken “as an important breakthrough for independent innovation of core technologies,” blockchain-related Chinese A-shares surged 10%.

Following today’s statement, the price of bitcoin experienced a 10% decrease and fell to just above $7,000. Nevertheless, according to an Oct. 29 statement, Chinese state media advised investors to not confuse blockchain support for virtual currencies support: “The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

For an extensive recount of China’s latest blockchain developments, go to our timeline published earlier this month.

Thanks for being with us,

your Editorial Team