China drastically tightened cryptocurrency regulation on Friday. It declared all transactions carried out in digital currency to be illegal. Cryptocurrencies must no longer be mined in the country. Thus, China probably wants to promote the use of the digital yuan.
A week ago, Bitcoin traded for more than $ 47,000. He started to weaken in the following days, but from Wednesday he recorded a relatively strong strengthening again. However, the tough directive came on Friday when the Chinese authorities announced that all transactions made in digital currencies would be considered illegal. Including the actual extraction of cryptocurrencies in China.
Bitcoin reacted by falling by two thousand dollars and dropped to the limit of 41 thousand. He then partially wiped out losses, but did not return to pre-Chinese levels. So far, the regulation has only applied to financial institutions.
Some analysts believe this is the next logical step on the road to the digital yuan. The digital form of the Chinese currency wants to be introduced by the Chinese central bank, and private cryptocurrencies are undesirable competition.
