China Bans Bitcoin, Again

The People's Bank of China stated that all cryptocurrency transactions are illegal, continuing a long history of attempts to stamp out the industry.
September 24, 2021, 1:37pm
China Bans Bitcoin, Again
PBOC. Image: 
TEH ENG KOON
 / Staff via Getty Images

The People's Bank of China posted a statement on Friday morning that said essentially all activity related to cryptocurrencies in the country, including making transactions with Bitcoin or issuing tokens, are illegal. 

China has long sought to crack down on cryptocurrencies, seemingly without complete success. The government banned banks from handling cryptocurrencies in 2013, and in 2017, the country banned exchanges. This year, the Chinese government cracked down on cryptocurrency mining, which led to a global exodus of mining firms. So, Friday's statement, which came in the form of a Q&A, can be seen as a retrenchment and expansion of a long history of trying to stamp out cryptocurrencies in China. 

In addition to stating that transacting with cryptocurrencies is illegal, the PBOC statement describes the need to coordinate the activities of agencies including the bank, the Cyberspace Administration of China, and the Ministry of Public Security, as well as local governments, to ban and crack down on cryptocurrency-related activities. 

That sounds pretty bad, but the mood among many in the cryptocurrency industry was nonetheless blasé. Numerous observers pointed to the many times China had "banned" Bitcoin in the past. "China has banned bitcoin and cryptocurrencies so many times that I’ve lost count," Bitcoin investor and pundit Anthony Pompliano, of Bitcoin Pizza fame, wrote in a viral tweet. The price of Bitcoin dipped slightly on the news, but largely recovered by early Friday morning.

Some Bitcoiners have even called the news "FUD"—a term for information intended to sow fear, uncertainty, and doubt—but as the recent influx of miners to places like Texas shows, China's declarations can have real effects.