On Wednesday 19th of May 2021, the crypto market got badly affected due to the extended crackdown of cryptocurrencies in China resulted in the devaluation of the crypto assets, and Bitcoin got affected prominently due to circulating news in the market as its value dropped below $40,000. It is being said that such a crash took place due to the amended crackdown and ban over cryptocurrencies which are already under controversy since 2017 in China. Although recently, it was disclosed that China is planning to launch digital Yuan, still the crypto market is going through crucial phases in China due to its policies.
Recently, China readjusted the policies related to digital assets, but Bitcoin and other cryptocurrencies, which have been in practice since 2017, got extended that includes the ban not only over virtual assets but also now banned the payment services and financial institutions related to the crypto transactions and restrained the crypto traders from any further non-speculative trading of cryptocurrencies.
Moreover, it was reported that three autonomous trading companies, i.e., China Banking Association, China Internet Finance Association, China Payment and Clearing Association, have reminded that authorities are collaborating with the prior PBoC (People’s Bank of China) decree related to cryptocurrencies.
It is depicted in a recent report that how the revealed news has resulted in the collapse of the skyrocketing prices of the virtual currencies and worth of crypto trading that is the ultimate threat to the investment and trust of the people as it would adversely affect the financial order and normal economy. Due to such prevailing conditions, the aforementioned three companies have restrained their clients and concerning members from relying on and investing in the business of trade-related to the cryptocurrencies.
According to the revealed statement, it was made clear that members of payment and financial services will no longer directly or indirectly entertain the customer with the services related to cryptocurrency trading, settlement and lending, stacking, purchasing and selling, and even the exchange of digital assets with the Chinese RMB.
Authorities also commented that cryptocurrencies have no real worth and value support as prices of digital assets are highly fluctuating, unpredictable, and even can be manipulated. It is important to note that in China, all sort of crypto trading is being done by means of peer-to-peer OTC markets, and it is a fact that Holding Bitcoin (BTC) is not illegal, but the Chinese government has emphasized the stance that government will not approve it to use virtual assets for the sake of payments and banking services.