Bitcoin falls sharply after China signals crypto crackdown

Bitcoin falls sharply after China signals crypto crackdown

Bitcoin tumbled 14 per cent to its lowest level since early February after Chinese regulators intensified efforts to crack down on the use of cryptocurrencies by financial institutions.

In a joint statement issued on the People’s Bank of China’s WeChat account, banking and internet industry associations said that financial and payment institutions should not accept cryptocurrencies as payment or offer services and products related to them.

Virtual currency “is not a real currency” and “should not and cannot be used as currency in the market”, the groups said in the statement issued late on Tuesday, which referred to a recent surge in prices as “speculation”.

Bitcoin was trading at a low of just over $38,500 on Wednesday morning in Asia, according to the Bitstamp exchange.

The development reflected China’s campaign to limit institutional activity in cryptocurrencies as it prepares to launch its own digital currency. Other markets such as the US have remained comparatively open to institutional involvement.

“Part of it is they have their own digital renminbi, part is the lack of control in terms of cash outflows and part of it is trying to make sure people don’t get scammed,” said Paul Haswell, a partner at law firm Pinsent Masons in Hong Kong, of