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Bitcoin’s price fell on Friday following increased calls from Chinese authorities to crack down on the mining and trading of cryptocurrency.
China’s Deputy Prime Minister Liu He and the State Council said in a statement that stricter regulations are needed to protect the financial system.
The statement released late Friday in China said it was necessary “to combat bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the social sphere.”
Bitcoin’s price for Coin Metrics dropped more than 8.5% when the news of the declaration was circulated. This was part of a wider slump in which the digital currency fell more than 40% from its peak. Other cryptos also suffered huge losses, with Ethereum and Dogecoin both falling more than 11% as prices continued to fall for the group.
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China’s tough talk comes just a day after US officials promised to toughen those who use Bitcoin to “conduct broadly illegal activities including tax evasion.” Finance said it would require reporting of crypto transfers in excess of $ 10,000, just like cash.
The concerns in China have centered on a number of issues. Much of the Bitcoin mining there is done by computers that use enormous amounts of energy to solve complex math problems and unlock the cryptocurrency.
Authorities around the world have raised concerns about how Bitcoin and its counterparts are being used in illegal ways.
“It is necessary to maintain the proper functioning of the stock, debt and currency markets, rigorously combat illegal securities activities and severely punish illegal financial activities,” the statement said.
As part of its efforts to streamline the burgeoning space for digital currencies, the Chinese central bank was one of the first in the world to develop its own digital currency supported by the yuan. The US Federal Reserve announced Thursday that it will shortly release a paper setting out its own research into the central bank’s digital currencies space.
