The People’s Bank of China (PBOC) said on Monday it has ordered banks and payment institutions to crackdown on crypto.
The move comes after the nation enforced a series of mining shutdowns, the latest of which took place in Sichuan.
Crackdown On Crypto
According to PBOC, banks must stop providing all services related to digital currencies. These include trading, settlement, and clearing of crypto transactions.
PBOC wasn’t the sole decider on the topic, and the move came after talks with other national institutions. Which include the likes of Agricultural Bank of China, Alipay, and Postal Savings Bank.
The central bank also asked the banks to identify the accounts of crypto dealers and exchanges, and cut off their payment channels.
PBOC identified cryptocurrency as a way of carrying out illegal cross-border transactions and money laundering. Accordingly, these guidelines had to be taken.
In a statement, the institution also said the banks have already agreed to take the necessary steps to counter crypto trading.
The Postal Savings Bank is the first to officially publish a similar notice, where it says it will take measures to prohibit digital currency transactions.
China’s Measures And Bitcoin Price
China’s movements regarding cryptocurrency seem to have a large impact on crypto prices.
Just last month, China’s State Council announced a reiteration of its crypto ban, and vowed to crack down on Bitcoin trading and mining.
The ban shook the entire crypto market, and Bitcoin’s price fell 50%. Here is how the BTC price looks like right now:
BTC back on a downward trend | Source: BTCUSD on TradingView
The NFT market also crashed in a similar timeframe so that its collapse might also be indirectly related to China’s measures.
At the moment, BTC is down 17.60% in the last 7 days. The reason for this crash may be China’s recent mining crackdown operations.
The most recent shutdown was in Sichuan’s Ya’an, a city known for its cheap hydroelectricity. Crypto Miners amassed in the area because of the inexpensive power, making the hub the largest hydro-powered mining location in the world.
Related Reading | Clean Bitcoin Mining Solutions Grow Thanks To Ongoing China Crackdown
Mining firms usually own a lot of investment in the cryptocurrencies they mine. As the Chinese government forces them to shutdown, they have to sell off their coins.
Since the movement of coins is large enough, the whole crypto market price takes a hit. The domino effect makes others sell out too, causing the prices to drop further.
As Ethereum‘s price moves in tandem with BTC, its price is naturally down as well. In the past week, ETH saw a decrease of over 21%.
ETH goes down | Source: ETHUSD on TradingView