A pedestrian walks past the signage for Ethereum, top and Bitcoin outside the Hong Kong Digital Asset Exchange Ltd. digital currency trading store. in Hong Kong, China on Thursday June 24, 2021.

Paul Yeung | Bloomberg | Getty Images

China’s central bank on Friday renewed its firm pitch on bitcoin, calling all digital currency activities illegal and pledging to crack down on the market.

In a question-and-answer session posted on its website, the People’s Bank of China said that services offering trading, order matching, token issuance and derivatives for virtual currencies are strictly prohibited. Overseas crypto exchanges providing services in mainland China are also illegal, the PBOC said.

“Foreign virtual currency exchanges that use the Internet to provide services to domestic residents are also considered illegal financial activity,” the PBOC said, according to a CNBC translation of the comments. Foreign crypto exchange workers will be investigated, he added.

The PBOC said it has also improved its systems to strengthen oversight of crypto-related transactions and eliminate speculative investments.

“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the bank said, reiterating past comments.

The price of bitcoin has fallen more than 3% on a 24-hour basis, last trading at around $ 42,239, according to data from Coin Metrics. Ethereum, the second largest digital asset, fell 7% to $ 2,860.

Highly crypto-exposed stocks also fell in pre-market trading, with Coinbase down almost 4%, MicroStrategy down 5% and Riot Blockchain down more than 6%.

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This is not the first time that China has been tough on cryptocurrencies. Earlier this year, Beijing announced a crackdown on crypto mining, the energy-intensive process that verifies transactions and strikes new currency units. This resulted in a sharp drop in the processing power of bitcoin as several miners took their equipment offline.

The PBOC has also ordered banks and non-bank payment institutions like Ant Group, a subsidiary of Alibaba, not to provide crypto-related services.

In July, the central bank asked a Beijing-based company to shut down for allegedly facilitating digital currency transactions with its software.

– CNBC’s Evelyn Cheng contributed to this report.


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