China banned the trading of cryptocurrency in 2019, but individuals and businesses were still able to conduct transactions using cryptocurrencies. However, this new law has effectively made the entire concept of cryptocurrencies illegal in any capacity within the country of China. This will have many knock-on effects both within and outside of China, as the estimated value of cryptocurrencies take a massive drop, and any business that used cryptocurrencies connected to China will have to quickly rethink their finances. Cryptocurrency is one of the fastest growing industries in the tech world, so to have this upset by China’s actions is certainly going to rock the boat. This is China’s final step of a multi-step plan to delegitimize and quash cryptocurrency influence within the country. In May, China said that crypto traders would have no kind of protection if anything went wrong with their investments. Then, in June, the government told banks and payment platforms to refuse any kind of cryptocurrency transfer, and also banned mining. It has now made the practice entirely illegal. The People’s Bank of China stated: Here is a quick look at three major cryptocurrencies over the past day. Bitcoin
Ethereum
Solana
Data and charts provided by Yahoo! Finance As you can see, every currency, no matter what it was worth a day ago, took a pretty significant fall the second that China announced the ban. This is not to say that these currencies will never recover, but this was a solid hit to their growing momentum. As mentioned, the value of Bitcoin has dropped by over $2,000, which is a colossal amount, and it is likely that other currencies will experience similar drops in value. Any business that used or was heavily invested in Bitcoin or other cryptos will have to quickly evaluate their finances and make sure that they’re still in a stable spot.
