Bitcoin, Dogecoin, and internet computers, among others, fell considerably after the People’s Bank of China stated that cryptocurrencies and digital tokens could no longer be used as forms of payment. The World’s most expensive and the most famous cryptocurrency, Bitcoin, went on a harsh ride, falling below $40,000 for the first time since February this year. It’s per token value dropped close to 10% since Wednesday. Other famous cryptocurrencies like Ether, Internet Computer, Dogecoin, and many more continued the downward trend of the cryptocurrency market.
According to PBOC’s official WeChat account, virtual currencies cannot and should not be valid for use in the market or used as a means of payment as, they are not real currencies. Beijing has abolished coin offerings within its borders, forcing traders and miners to move overseas to conduct business operations relating to cryptocurrencies.
China has been seemingly working on its digital currency yuan, intending to reduce cash flow in the markets and to reduce the role of technological institutions carrying out financial operations other than banks. At one point, China was home to over 90% of cryptocurrency mining and trading. Still, as these regulations have come into play, most of these traders and miners have settled overseas. They have spread throughout the world in search of suitable and economical places to conduct business.
Many Chinese traders were now conducting business on trading platforms owned by Chinese exchanges, who had relocated overseas. At the same time, the Chinese transparent cryptocurrency market has been booming well, especially since the beginning of this year. China-focused exchange platforms like Binance and MXC allow users to open up their operative accounts online, which only takes a few minutes to complete, leading to a lot of trader base moving to these platforms for trade. In addition, MXC & Binance also provide services like converting digital Yuan to cryptocurrencies through mediating banks and online payment channels.
China’s digital currency, the Yuan, has indicated that the cryptocurrency market can pose as a barrier to its success, and hence, the regulations are being tightened and are being revised to facilitate their traditional trade practices. These moves will lead to a very saturated cryptocurrency trade market within China and will make it increasingly difficult for traders to buy cryptocurrency using various online payment channels as well as banking institutions. Furthermore, exchanging Digital Yuan for different cryptocurrency values will also face significant difficulties. In addition, the Banks and payment gateway companies will face difficulties in identifying money flows that relate to the crypto market, as the majority of trades are untraceable.