China cracks whip on cryptos

Bengaluru: In major setback to cryptocurrency segment in the dragon country, China's central bank has said that all cryptocurrency-related transactions are illegal and must be banned. "All cryptocurrencies, including bitcoin and tether, are not fiat currency and can't be circulated on the market," People's Bank of China said on its website.

Ten Chinese government agencies, including the central bank as well as banking, securities and foreign exchange regulators, said in a joint statement that they would work closely to maintain a high-pressure crackdown on speculative trading of cryptocurrencies.

After the ban, bitcoin dropped as much as five per cent on Friday. Ether also tumbled, as did other crypto stocks. Currently, countries like Algeria, Bolivia, Colombia, Egypt, Indonesia, Iran, Iraq, Nepal, North Macedonia are the other countries which have banned cryptocurrencies completely.

India has not banned these digital currencies, but is yet to come up with any regulations in this space. RBI has formed a committee which is deliberating on the proposed regulations on digital currency space.

RBIGovernor, Shaktikanta Das on September 9 said the central bank has serious concerns with regards to the financial stability of cryptocurrencies. The RBI chief said, "we have serious, major concerns on cryptocurrency with respect to financial stability, have conveyed the same to government of India."

This statement had come at a time when the government is planning to come up with regulations for the industry. According to data from crypto exchanges, there are approximately 1.5 crore Indians who have invested in cryptocurrencies with a holding worth Rs15,000 crore. Around 350 startups are operating in the blockchain and crypto space.