Several Chinese banking federations have warned that cryptocurrencies “are not true currencies” and have high speculative risk.
Bitcoin fell below the symbolic threshold of US $ 40,000 on Wednesday, for the first time in more than three months, following a warning from several Chinese banking federations about cryptocurrencies, which they do not consider “true currencies.”
Also read: Bitcoin falls below $ 50,000 as Musk criticizes its energy use
In the early afternoon in Beijing (around 06:30 GMT), the main cryptocurrency was trading at US $ 39,600, registering a drop of more than 8%, although in the morning it was still worth US $ 43,602.
Cryptocurrencies “are not true currencies,” several benchmark Chinese banking federations considered Wednesday, warning of the danger of “speculation” in a country that is preparing its own digital currency.
China was for a time one of the strongholds of bitcoin, the most widespread virtual currency.
However, in 2019 Beijing took a radical turn and declared cryptocurrency payments illegal in the country, accusing them of serving “criminal activities.” The country was concerned about the speculative risk that cryptocurrencies could pose to its financial system and social stability.
A “risk to the world economic order”
And while interest in virtual currencies abroad grows, three banking federations asked financial establishments on Tuesday not to “accept […] or use cryptocurrencies” as a means of payment.
We recommend: Bitcoin rivals gold
“Recently, the prices of virtual currencies soared and then sank” abroad, and speculative activities “took a leap,” they noted in a joint statement.
This “seriously undermines the security of people’s property and disrupts the world economic order,” criticized the National Federation of Internet Financing, the Banking Federation of China and the Federation of Payments and Clearing.
Driven by interest from increasingly serious investors – from Wall Street institutional banks to Silicon Valley giants – the cryptocurrency market grew to more than $ 2.5 trillion in mid-May 2020, according to the Coinmarketcap page. , which collects information on almost 10,000 cryptocurrencies.
But the market has since lost nearly $ 700,000, mostly after the change of heart from Elon Musk, the head of electric vehicle builder Tesla and founder of Paypal.
After announcing at the beginning of the year that he had invested a part of Tesla’s treasury in bitcoins, the billionaire decided to ban, in mid-May, the payment of his vehicles with bitcoins, citing the risk that the mining of this virtual currency.
Follow the news of El Espectador on Google News
