China announced that they will crack down on Bitcoin mining and trading activities in its bid to fend off financial risks. The country will crack down on illegal activities in the securities markets and maintain the stability of stock, bond and forex markets. China’s state broadcaster CCTV announced, “Bitcoin is no longer an investment tool to avoid risks. Rather, it’s a speculative instrument. The cryptocurrency is a lightly-regulated asset often used in black market trade, money-laundering, arms smuggling, gambling and drug dealings.”
With the announcement the price of Bitcoin dropped roughly 13%, a day after seeing the market slowly recover.
Our Take
The Chinese government are control freaks. They are developing a Digital Yuan that is programmable and trackable. This gives the Chinese government enormous control over the economy. So why would the Chinese government support a global currency that is built on anonymity? China wants control, so you should expect FUD coming from China.
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