China Bans Cryptocurrencies, Market Shocks

Major cryptocurrencies in the market are trading at a drop of more than 5% after China announced on Friday that all virtual currency transactions on its soil are illegal, a move that some experts deemed a “dictatorship.”

The People’s Bank of China published a statement on Friday making it clear that “cryptocurrencies are not legal tender” and declaring that transactions using virtual currency are “illegal” in order to “change the economic and financial system,” which experts say they attribute to a measure of greater state control over the country. Population economy and finances.

Regarding the reasons that prompted the Chinese central bank to take action against cryptocurrencies, experts, contacted by the EFE news agency, cited many reasons, including the Chinese government’s control of the economy, the lack of freedom in the country, and the implementation of the digital system. currency by central banks.

For Blockchain Intelligence managing partner Almudena de la Mata, it is not surprising that cryptocurrencies are eliciting a negative reaction from some central banks, as public “blockchains” and their crypto-currencies largely escape the control of traditional power structures.”

The reaction, in the opinion of the CEO of crypto exchange Bit2Me, Leif Ferreira, is another step in the Chinese government’s censorship process to hamper citizens’ financial freedom.

Co-founder of digital asset custodian Onyze, Alvaro Alcáñez, expressed the same sentiment, believing that this action probably wouldn’t be the last the Chinese executive applied against crypto assets, as he “has been applying intense scrutiny to crypto assets for many years to its economy.” often through restrictive policies.

He explained that “it is added to this that Bitcoin, along with the rest of the crypto activity, is at the other extreme, as it defends freedom and monetary independence” against its interests.

Almudena de la Mata also assessed the potential relationship between scaling and the evolution of central bank digital currencies and warned of an interesting geopolitical battle, due to the development of cryptocurrencies, since the release of a “competition for monetary dominance in the age of currencies.” by central banks.

China is currently developing a project for the digital yuan, a digital version of the renminbi (the official name of the Chinese currency), with the support of the People’s Bank of China, which will have the same value as the physical yuan, a project that Lev Ferreira intends to send the population and abolish any alternative to being free, such as Cryptocurrencies.

“The digital yuan is nothing more than a measure against freedom, it is a way to keep the population under control,” he said.

For Ferreira, if central banks implemented similar rules, they would become a “dictatorship,” because “the central bank cannot force citizens to choose not to use bitcoin or other cryptocurrencies as money,” he said.

Experts considered that the scale of the Chinese administration affects the global cryptocurrency market, due to the economic, political and demographic weight of this country in the world.

The CEO of Bit2me pointed out that the People’s Bank of China’s decision shows the incompetence of those working in these banking institutions and that they justify themselves in avoiding money laundering or terrorist financing, something that could apply to any central bank.

“I think the Chinese government is trying to confuse the population with silly and misleading messages,” he said.