Bitcoin is falling sharply after China expressed its crackdown on cryptocurrencies

Bitcoin fell to 14 percent from its lowest level since early February after Chinese regulators stepped up their efforts to reduce the use of cryptocurrencies by financial institutions.

In a bank statement from the People’s Bank of China’s WeChat account, banking and internet industry associations said financial and payment institutions should not accept cryptocurrencies as payment, nor offer services and products related to them.

Virtual currency “is not real currency” and “should not be used as a currency in the market and cannot be used,” the groups said in a statement released late Tuesday. the rise in recent prices as “speculation”.

Bitcoin was trading just below $ 38,500 on Wednesday morning in Asia, according to the Bitstamp exchange.

The development reflected the Chinese restriction campaign institutional activity in cryptocurrencies as it prepares to launch its digital currency. Other markets such as the US are open to institutional involvement.

“Part of that is they have their digital renminbi, another part is the lack of control over making money and part of it is trying to keep people from cheating,” said law firm partner Paul Haswell Pinsent. Masons in Hong Kong, repression of China.

China’s pressure on cryptocurrencies gained strength in 2017 closed bitcoin exchanges in the country, which previously had the largest share of global trade.

Government plans digital renminbiThis would allow the central bank to record all currency transactions in real time, providing an adversarial mechanism for non-cash payments. compete With Ant Group and Tencent’s extensive online fintech platforms.

In the US, regulators have made it easier for retail investors and cryptocurrencies to buy allowed the list crypto exchanges in public markets. Large U.S. financial institutions, such as Goldman Sachs and JPMorgan, are being explored offering investments to manage wealth in digital currencies.

The price of Bitcoin has risen 300 percent in the last 12 months, however last sold.

“I wouldn’t be surprised to see other regulators and policymakers do the same [as the Chinese restrictions] in the coming weeks they will warn investors about the risks of speculative trading or the volatility of crypto markets, ”said Henri Arslanian, head of cryptography at consulting firm PwC.

“The reality is that we are seeing a steady influx of institutional actors and institutional investors into this space and it is unlikely that it will slow down any time soon.”

The recent volatility in cryptocurrency prices has raised doubts among some institutional investors about their value, along with UBS Wealth Management and Pimco. express reservations about the potential of digital currencies as an asset class.

Cryptocurrencies are unregulated in Hong Kong, a semi-autonomous territory of China. However, in November, the city’s Financial Services and Treasury Office released proposals banning retail investors from trading cryptocurrencies.

“If I have something I think the market is growing in Hong Kong when it comes to the cryptocurrency industry,” Haswell said.

Additional report by Wang Xueqiao in Shanghai