Bitcoin plummets after China intensifies cryptocurrency crackdown
China has toughened its stance on cryptocurrencies with the People’s Bank of China announcing Friday, that services offering trading, order matching, token issuance, and derivatives for virtual currencies are now strictly prohibited.
The bank vowed to take measures to stamp out illicit activities involving digital currencies.
One such measure the nation is taking is to block overseas crypto exchanges that would provide services to Chinese residents via the internet.
As this news was announced, Bitcoin fell about 5 percent and Ethereum, another leading cryptocurrency, was down 9 percent, CNN reports.
As the price of Bitcoin falls by more than $2,000, China is saying it will gradually start shutting down crypto mining operations, and no new mining projects will be permitted, according to the National Development and Reform Commission.
These announcements parallel what Chinese Vice Premier Liu said back in May when he told a group of finance officials the government would "clamp down on bitcoin mining and trading activity" as part of its goal to achieve financial stability.
These ramped-up measures in China are reportedly due to the fact that the computers needed for bitcoin mining eat up a significant amount of computing power and electricity, which raises concerns about the cost to the environment.
China was expected to generate more than 130 million metric tons of carbon emissions by 2024, which is disastrous for the nation's ambitious climate plans.
President Xi Jinping has promised that the country will be carbon neutral by 2060.