China wants to ban payments in crypto, prices fall further

China's central bank wants to restrict payments in virtual currencies such as Bitcoin, according to reports Reuters. Financial institutions and payment processing companies are no longer allowed to offer services related to virtual currencies. The central bank also warns of the risks of cryptocurrency speculation. The news put further pressure on the prices of virtual currencies.

This announcement by the central bank was not accompanied by the announcement of new legislation. However, it does look like it will become more difficult for Chinese people to trade and use virtual currencies as a means of payment. The rise of cryptocurrencies is bothering the central bank, because it allows people to circumvent China's strict capital controls. The virtual currencies also compete with the digital yuan, the new Central Bank Digital Currency.

Virtual currencies under pressure

The news from China put further pressure on the prices of virtual currencies. In recent days, the price of Bitcoin has already fallen due to statements by Elon Musk, who called the crypto coin unsustainable. Previously, Tesla accepted the coin as a means of payment and bought the company for $1.5 billion in Bitcoin. The news from China saw the price fall further to less than $35,000 on Wednesday, the lowest level since February. From its all-time high of around $65,000 in April, the largest virtual currency has lost more than 40% of its value.

Other cryptocurrencies also lost a lot of money. Over the past seven days, Ethereum has also lost more than 40%, while Binance Coin and Dogecoin have lost 45% and 31%, respectively, in a week. Cardano, Ripple and Polkadot did less badly and are down just under 20% at the time of writing compared to a week ago. The total market value of all cryptocurrencies dropped to $1.67 trillion, according to data from Coinmarketcap. By comparison, a week ago it was more than $2.5 trillion.

This contribution comes from Geotrendlines