China declares all cryptocurrency transactions illegal

BEIJING (AP) - China´s central bank on Friday declared all transactions involving Bitcoin and other virtual currencies illegal, stepping up a campaign to block use of unofficial digital money.

Chinese banks were banned from handling cryptocurrencies in 2013, but the government issued a reminder this year. That reflected official concern cryptocurrency mining and trading might still be going on or the state-run financial system might be indirectly exposed to risks.

Friday's notice complained Bitcoin, Ethereum and other digital currencies disrupt the financial system and are used in money-laundering and other crimes.

“Virtual currency derivative transactions are all illegal financial activities and are strictly prohibited,” the People´s Bank of China said on its website.

Promoters of cryptocurrencies say they allow anonymity and flexibility, but Chinese regulators worry they might weaken the ruling Communist Party´s control over the financial system and say they might help to conceal criminal activity.

The People´s Bank of China is developing an electronic version of the country´s yuan for cashless transactions that can be tracked and controlled by Beijing.

FILE - In this Feb. 9, 2021, file photo, the Bitcoin logo appears on the display screen of a cryptocurrency ATM at the Smoker's Choice store in Salem, N.H. China's central bank on Friday, Sept. 24, 2021, declared all transactions involving Bitcoin and other virtual currencies illegal, stepping up a campaign to block use of unofficial digital money. (AP Photo/Charles Krupa, File)