Tuesday, July 27, 2021

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    Bitcoin, Dogecoin and Ethereum Prices Fall As Pressure Mounts on Cryptocurrencies in China

    Bitcoin fell 10% to $31,179 per coin, the lowest level since January, according to Coindesk. It rallied a bit and was recently down 5% to around $33,000 per coin, the lowest in two weeks. But that’s still a 50% drop from an all-time high in April.
    Other cryptocurrencies also fell: Ethereum lost 8%, while Dogecoin fell 20%, erasing all its gains since April.

    Cryptocurrencies have had a difficult two months for various reasons, including concerns about the environmental impact of mining currencies and increased government scrutiny.

    Cryptocurrencies are getting a lot of attention this week from China, which for weeks has been signaling a more aggressive push to limit the use of cryptocurrencies.

    The People’s Bank of China said on Monday that it has pulled from the market Alipay, the widely popular online payments platform operated by Jack Ma Ant Group, along with five major lenders, asking them to “thoroughly investigate and identify” exchanges and merchants. of cryptocurrencies so that they can cut off any cryptocurrency trading.

    “Cryptocurrency trading and speculative activities … create risks of illegal cross-border transfers of assets and money laundering,” the central bank said.

    Lenders include Industrial and Commercial Bank, Agricultural Bank of China, Construction Bank of China, Postal Savings Bank of China, and Industrial Bank.

    All six institutions said after the central bank announcement that neither institutions nor individuals can use their platforms for any cryptocurrency-related activities. Alipay has also pledged to intensify investigations against crypto transactions on its platform.

    The announcement is not a new policy for Beijing, but it reinforces how far the country is willing to go to restrict the use of bitcoin and other digital currencies.

    During the weekend Chinese government media reported that the Sichuan province, southwest China, ordered to stop all cryptocurrency mining operations and cut the power supply to several mining facilities. The county is an important center for mining, a critical step in the process necessary to get more of these coins into circulation.

    Although China does not completely ban cryptocurrencies, regulators declared in 2013 that bitcoin is not a real currency and prohibited financial and payment institutions from dealing with it. At the time, they mentioned the danger of using bitcoin for money laundering, as well as the need to “maintain financial stability” and “protect the status of the yuan as an official currency.”

    The growing campaign also aims to bolster China’s state-backed digital yuan initiative, which authorities want to implement in order to control money flows.

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