China comes close to banning cryptocurrencies
Chinese regulators have effectively banned cryptocurrencies, declaring all transactions to be “illegal financial activities”.

Chinese regulators have moved one step closer to banning cryptocurrencies. On 24 September the People’s Bank of China (PBOC), the central bank, announced that “virtual currency-related business activities are illegal financial activities”. The bank blames cryptocurrency speculation for “breeding illegal and criminal activity”.
Beijing’s crackdown on cryptocurrencies has been going on since 2013, says Scott Nover for Quartz. Earlier this year it banned financial institutions from providing crypto-related services. That edict had sent Chinese bitcoin buyers onto overseas platforms instead. The new rules seek to close that loophole. “Crypto transactions and crypto services of all kinds are banned in China,” says Henri Arslanian of PriceWatehouseCoopers. “No room for discussion. No grey areas.” The measures don’t appear to amount to an outright ban on cryptocurrency possession, says Andrew Griffin in The Independent. But related activities are now heavily restricted. The PBOC has made clear that digital currencies are “not legal tender”. Bitcoin prices plunged by 6% on the news. But prices rebounded over the weekend, says Daren Fonda in Barron’s. Cryptocurrencies have made up the lost ground caused by the announcement.
Trading around $42,000 early this week, bitcoin has gained 30% since the start of the year but is down by one-third since hitting an all-time high in mid-April. A ban on transactions may not tank prices because “about 70% of all circulating bitcoin [is] now held by long-term holders, up from 59% in May”. For now, crypto markets appear to think that they can do without “China or its vast market”. Yet “whether that lasts remains to be seen” as other Asian countries such as Singapore also tighten the screws.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
HMRC warning after scammers target 170k taxpayers – how to stay protected
Scammers are using increasingly sophisticated methods to trick people into sharing personal details or paying for fake self assessment tax refunds
-
Average homes in every English region are now liable for stamp duty – how much will you pay?
As average house prices in every English region are now above the stamp duty threshold, we look at how much tax you will pay.
-
8 of the best properties for sale with shooting estates
The best properties for sale with shooting estates – from an estate in a designated Dark Sky area in Ayrshire, Scotland, to a hunting estate in Tuscany with a wild boar, mouflon, deer and hare shoot
-
What we can learn from Britain’s "Dashing Dozen" stocks
Stocks that consistently outperform the market are clearly doing something right. What can we learn from the UK's top performers and which ones are still buys?
-
The most likely outcome of the AI boom is a big fall
Opinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
The rise of Robin Zeng: China’s billionaire battery king
Robin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
-
Europe’s forgotten equities offer value, growth and strong cash flows
Opinion Jonathon Regis, co-portfolio manager, Developed Markets UCITS Strategy, Lansdowne Partners, highlights forgotten equities he'd put his money in
-
How retail investors can gain exposure to Lloyd’s of London
It’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The flaw in Terry Smith’s strategy at Fundsmith
Opinion Fundsmith has invested in some excellent companies, but it has struggled to decide when to sell, says Max King
-
The goal of business is not profit, but virtue
Opinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins