Cryptocurrencies fall after China announces crackdown on Bitcoin mining and trading behavior

Bitcoin on Friday dropped after the Chinese authorities announced an intensified crackdown on Bitcoin mining and trading.

Chinese Vice Premier Liu He and the State Council Financial Stability and Development Committee, said tighter regulation is needed to protect the financial system.

The statement from the 51st meeting of the financial stability, released late Friday in China Standard Time, said it is necessary to “crackdown on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”

The price of the Bitcoin dropped more than 12%, to $36,253.33, the 24-hours lowest till 1 pm ET, after the news circulated, part of a broader fall that the cryptocurrency has seen, tumbling down more than 44% from its peak, since April.

Ether, the second-largest cryptocurrency in terms of the market cap, also dropped more than 13% to $2366.83.

China’s stricter crackdown comes just a day after the U.S. moved to take action on those using bitcoin to conduct “illegal activity broadly including tax evasion.” The Treasury Department said taxpayers would have to report to Internal Revenue Service (IRS) on crypto transfers of more than $10,000.

“It is necessary to maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crackdown on illegal securities activities, and severely punish illegal financial activities,” the Chinese authority said, stating several concerns about the economy.

As part of streamlining the mushrooming digital currency space, the People’s Bank of China (PBoC), the Chinese central bank, developed a digital currency backed by the Yuan.

The U.S. Federal Reserve on Thursday said it would soon release a research paper outlining Central Bank Digital Currency (CBDC).

Picture Credit: Reuters