The Chinese government has stopped financial institutions or payment companies from conducting cryptocurrency-related transactions following the recent meltdown in Bitcoin price.
The government gave the directive through the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
Although the Asian country had placed an embargo on cryptocurrency exchange in 2017, the government allowed the citizens to hold cryptocurrency.
The recent ban means cryptocurrency cannot be used for payment or any other financial service in the country.
The ban followed the crash in Bitcoin price after Tesla founder, Elon Musk’s recent announcement crashed the cryptocurrency market.
The billionaire had said a few days ago that Tesla would no longer accept Bitcoin as a mean of payment for its vehicles and this negatively impacted the confidence of investors.
The Chinese agencies in a joint statement said digital assets have no real value as cryptocurrencies could be easily manipulated, so financial institutions are not allowed to offer any services or goods in exchange for cryptocurrencies.
The statement read: “Recently, cryptocurrency prices have skyrocketed and plummeted and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.”