China's central bank bans all crypto transactions, Bitcoin price falls

China's political crusade against cryptocurrencies is going into the next round. Back in June, the Chinese government decided to outlaw the mining of cryptocurrencies like Bitcoin in all of its provinces. In the regimes next step that has been reiterated today, all financial transactions that involve virtual currencies have also been declared illegal. According to a report by Tom's Hardware, this radical decision has been announced in a statement by the Chinese central bank, also called The People's Bank of China.

These new rules will prohibit all financial institutions in the East Asian country to be involved in any kind of transaction that involves cryptocurrencies. It is also illegal for Chinese citizens to use the services of banks overseas in order to trade with cryptocurrencies. The only virtual currency that seems to be exempt from this draconic ruling is the digital yuan, often abbreviated as e-CNY.

The new declaration means that there will be no competition for the e-CNY on the gigantic Chinese market. The prohibition of trades involving Bitcoin and Ethereum is apparently also intended to further increase the influence and power of China's own official cryptocurrency. As a reaction to this news, the price of BTC has decreased by 5 percent today, while ETH has fallen by 6 percent.