China has issued a new ban against cryptocurrencies. This time, the ban issued by the Central Bank of China refers to financial institutions and payment companies that will not be able to provide services that involve cryptocurrency transactions.
In fact, the announcement was issued by the China National Internet Finance Association, the China Banking Association, and the China Payments and Clearing Association.
The statement says:
"Recently, cryptocurrency prices have skyrocketed and fallen, and speculative cryptocurrency trading has rebounded, seriously infringing on the security of people's property and disrupting the normal economic and financial order."
The statement of the three entities is a flagrant call not to offer financial services or payment services in cryptocurrencies since the volatility, particularly evident these days, makes it an unreliable and unsafe product.
The statement also notes that cryptocurrencies have no realistic value and they are extremely easy to manipulate.
Yet another cryptocurrency ban in China
The relationship between cryptocurrencies and China seems decidedly complicated. Already in 2017, exchanges and ICOs were banned. However, the Chinese are not formally prevented from owning cryptocurrencies.
And it is surprising that China is one of the world's leading producers of bitcoins given the large size of its mining farms.
However, the Beijing authorities are not entirely convinced of the value of cryptocurrencies and are now dealing a new blow to the sector. This is because China's ban affects nearly one sixth of the world's population.
Regulation in India
According to the Economic Times, an expert panel is being formed to regulate the sector. However, India is not expected to reimpose a ban, which was deemed unconstitutional in the past and, according to Economic Times sources, is now out of date.
Rather, it would be a discussion to study the uses of blockchain and suggest ways to regulate cryptocurrencies. On the surface, this is not a ban, but the discussion is still in its infancy.
The consequences for the market
Meanwhile, as expected, the new ban in China has hit Bitcoin like a fury, causing a sharp drop in price.
BTC, at the time of writing this article, is currently down 15% and has dropped below $ 40,000, the threshold he left in February. It is worse for Ethereum, which just a few days ago reached $ 4,300 and today is under $ 3,000 with a loss of 16%.
These declines come in an already difficult week for the sector, marked by the words of Elon Musk. However, the drop was expected, given that the entire sector has just returned from a rally that has led many cryptocurrencies to multiply their value and see new all-time records. All that remains to be seen now is whether today's fall is a "adjustment" or one sign that the bull run is over.