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China Strikes Cryptocurrencies Again, Bitcoin Slumps Again

The highest level of government in China has proposed new measures to regulate mining in the country. The proposal has been received as a further blow to the digital asset market causing BTC to plummet close to 10%.

The Finance Committee of China held a meeting to take action “to study and deploy key tasks in the financial sector.” This meeting was chaired by Liu He, Deputy Prime Minister of the State Council and Director of the Finance Committee.

During the meeting, new solutions were sought to increase support for the country’s “real economy”. To this end, it was proposed to use, in a comprehensive manner, a variety of monetary policy tools, with the aim of maintaining reasonable liquidity, effectively preventing and defusing financial risks, and promoting a virtuous economic and financial cycle.

Among the proposed tools, the “prevention and resolute control of financial risks” stands out. Within this section, the Chinese government has included taking energy measures against Bitcoin mining as commercial behavior. This is the first time that the highest layer of the Chinese government has proposed measures against digital asset mining. The government’s objective is to prevent individual risks derived from individual activity and that these are not transmitted to the social field.

Earlier in the week, the Chinese government dealt a severe blow to the crypto ecosystem by prohibiting financial institutions from providing cryptocurrency services. The new news has once again shocked a market that seemed to have stabilized. Bitcoin (BTC) plunged about 10% in the hour after the news broke, altcoin such as Polkadot (DOT) and Ethereum (ETH) have followed the asset in its decline.

The Chinese government is expected to also take energetic measures against Bitcoin’s own transactions, this does not currently seem one of its priorities. The government is focusing on “preventing the transfer of personal risks to society”, which means that they are paying greater attention to social stability.

China’s decisions have hit the crypto ecosystem a lot recently. It is expected that with the new energy decisions related to mining, many groups of miners will decide to leave the country.

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