BTC Slide Continues as China Warns of Crackdown

The People’s Bank of China repeated its warning against cryptocurrencies, saying that digital tokens could not be used as a form of payment.

The country’s central bank posted a joint notice from banking and internet industry associations on its official WeChat account, warning the finance industry not to offer cryptocurrency services.

Virtual currencies should not and cannot be used in the market because they’re not real currencies and that financial and payments institutions are not allowed to price products or services with virtual currency, the notice said.

Bitcoin fell over 14 percent in 24 hours to hover around $40,000 on Wednesday. Other major cryptocurrencies also continued to fall, including ethereum, which dipped below $3,000 for the first time since May 2.

Bitcoin’s weeklong slide was promoted by Tesla founder Elon Musk’s comments about its environmental impact. The cryptocurrency has fallen nearly 40 percent since its high of over $64,000 in February.

Less than two years ago, regulators in Shanghai, Shenzhen and Beijing began ramping up efforts to probe or shut down exchanges, which resulted in the closure of several Chinese exchange operators.

The country is readying to realize part of its blockchain ambitions with the launch of its own central bank-backed digital currency and has laid the regulatory foundation for the launch.