China squeezes bitcoin mining and trading

China squeezes bitcoin mining and trading

China has taken another bite out of bitcoin's potential, stepping up restrictions on cryptocurrency mining and ordering banks to block crypto-related transactions. The news drove bitcoin's price 10 per cent lower to a two-week low today.

China's central bank warned several of its largest state-owned banks and Jack Ma's Alipay to "investigate and identify“ bank accounts facilitating cryptocurrency trading and block all corresponding transactions, reports our Beijing bureau.

It had called in the Agricultural Bank of China, China Construction Bank and ICBC among others to discuss "providing services for cryptocurrency transaction speculation“. The regulator wants the financial groups to identify and block all transfers to accounts held by cryptocurrency exchanges and other offshore middlemen. The central bank is steering citizens towards using its own digital currency, which it has started testing in large-scale pilots.

"Bitcoin trading in China will continue but become less liquid, and spreads will increase,“ said Leo Weese, co-founder of the Hong Kong Bitcoin Association. "People will limit themselves to trading with their friends and trusted friends-of-friends.“

Elsewhere, officials in all of China's hubs for mining operations followed Inner Mongolia and released further measures targeting bitcoincreators. Sichuan, a hydropower-rich province in south-west China, has ordered the 26 largest local mines to stop operating