Bitcoin crashes as Chinese Central Bank calls for ban on cryptocurrency trading.

Pan Gongsheng

The last 48 hours have not been good for bitcoin and other cryptocurrencies.  Both the German Central Bank and the French finance minister Bruno Le Marie have called for increased regulations.  

Today, the Chinese Central Bank has joined the chorus for more regulation.

PBOC Vice Governor Pan Gongsheng Has gone even further than Germany and France by calling for a ban on centralized trading of virtual currencies as well as individuals and businesses that provide related services.

National and local authorities should ban venues that provide centralized trading of virtual currencies, of which bitcoin is the biggest, Pan said. They also need to ban individuals or institutions that provide market-making activities, guarantees, or settlement services for the centralized trading of the currencies, such as online “wallet” service providers.

“The financial work conference clearly called for limiting ‘innovations’ that deviate from the need of the real economy and escape regulation,” He went on to say, referring to a previous meeting.

Authorities should also block domestic and foreign websites and close mobile apps that provide centralized virtual currency trading services to Chinese users, and sanction platforms that provide virtual currency payment services, Pan said. He also called for local authorities to investigate services that help people move funds overseas.

Bloomberg reported on Monday that Chinese authorities plan to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading.

He proposed local governments use regulations around electricity prices, land use, tax and environmental protection to guide businesses involved in such activities “toward an orderly exit”.

“Pseudo-financial innovations that have no relationship with the real economy should not be supported,” he said.

Bitcoin and other cryptocurrencies have not reacted well to the statements made by central banks in the last couple of days.  Bitcoin dropped over $1,500 in under an hour earlier today and at the time of writing is now valued at less than $12,000.

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