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After Chinese regulators stepped up efforts to crack down on the use of cryptocurrencies by financial institutions, Bitcoin plummeted 14% to its lowest level since early February.
The bank and the Internet Industry Association stated in a joint statement on the WeChat account of the People’s Bank of China that financial and payment institutions should not accept cryptocurrency as payment or provide services and products related to it.
These organizations said in a statement issued late on Tuesday that virtual currencies are “not real currencies” and “should not and cannot be used as market currencies.” Recent price increase As a “speculation.”
According to data from the Bitstamp exchange, the trading price of Bitcoin in the Asian market last Wednesday morning was slightly lower than $38,500.
Development reflects China’s Restrict movement Cryptocurrency institution activities when preparing to launch your own digital currency. Other markets such as the United States are still relatively open for institutions to participate.
Paul Haswell, a partner at Pinsent Law Firm, said: “Part of the reason is that they have their own digital renminbi, part of the reason is the lack of control over cash outflows, and part of the reason is to ensure that people are not deceived.” Hong Kong masons, The suppression of China.
In 2017, China’s pressure on cryptocurrencies increased shut down Bitcoin exchanges in the country used to account for the majority of global transactions.
Government plan a digital renminbi, It can provide real-time records of all currency transactions for the central bank, and can provide an unparalleled cashless payment mechanism competition It has a huge online financial technology platform from Ant Group and Tencent.
In the United States, regulators have made it easier for retail investors to buy cryptocurrencies and Allow listing The number of cryptocurrency exchanges on the public market.Major U.S. financial institutions such as Goldman Sachs and JPMorgan Chase are exploring Provide investment Provide digital currency to wealth management clients.
Although the price of Bitcoin has risen 300% in the past 12 months Recent sell-off.
“I would not be surprised to see other regulators and policymakers doing the same [as the Chinese restrictions] In the coming weeks, they warn investors of the risks of speculative trading or volatility in the crypto market,” said Henri Arslanian, head of global cryptocurrency at consulting firm PricewaterhouseCoopers.
“The reality is that we are seeing a constant influx of institutional players and institutional investors in this area, and it is unlikely to slow down anytime soon.”
The recent volatility of cryptocurrency prices in UBS Wealth Management and Pimco has caused some institutional investors to doubt its value. Express reservation Regarding the potential of digital currency as an asset class.
In the semi-autonomous Hong Kong region of China, cryptocurrencies are largely unregulated. However, in November, the city’s Financial Services and Finance Bureau issued a proposal to prohibit retail investors from trading cryptocurrencies.
Haswell said: “As far as the cryptocurrency industry is concerned, I think the Hong Kong market is growing.”
Additional reporting by Wang Xueqiao in Shanghai
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