The National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China repeated their opinion on forbidding crypto services. Bitcoin plunged $40,000 for the first time in more than three months Wednesday after China said cryptocurrencies would not be permitted in the deals.
China has also issued a warning to investors against unpredictable trading in cryptocurrencies. Trading in cryptocurrencies has been prohibited in China since 2019 to stop money laundering as leaders try to prevent people from shifting cash overseas. The country had been home to nearly 90% of the global trade in the sector.
Furthermore, Bitcoin plunged Wednesday from $45,600 to $39,240, its lowest level since early February. It soared record-high $64,870 as recently as last month. Analysts have cautioned it could decrease as far as $30,000.
One of the reports disclosed that the prices of Virtual currency have skyrocketed and plunged recently. It results in a bounce-back of unpredictable trading activities of virtual currency. Moreover, it has badly harmed the security of the investment of the people and harmed the normal economic and monetary orders.
The main aim of China’s report is to stress the ban on cryptocurrencies. Chinese authorities disclosed that financial institutions, payment institutions, and other member units must efficiently improve their social obligations.
They are not permitted to use virtual currencies for products and services. Moreover, they must not underwrite insurance businesses related to virtual exchanges. It also not include virtual currencies in the scope of insurance legal responsibility and must not offer clients other services.