China Outlaws All Cryptocurrency Transactions, Mining Activities

China’s central bank announced Friday that all cryptocurrency transactions and mining activities are illegal, banning financial institutions from providing digital asset services.

“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the People’s Bank of China (PBOC) said in a statement Friday, according to a translation by CNBC. These services include derivatives trading, order matching and token issuance.

The country also banned all cryptocurrency mining activities, issuing a joint statement from 11 government agencies Friday warning of the “hidden risks caused by the blind and disorderly development” of the digital technology, according to a New York Times translation. China said the ban was also motivated by the desire to reduce energy consumption and carbon emissions caused by cryptocurrency mining.

The PBOC said foreign exchanges would no longer be able to provide cryptocurrency services to Chinese citizens, and people working for foreign exchanges would be investigated, according to CNBC’s translation.

“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity,” the PBOC said.

The orders follow the PBOC’s development of its own virtual currency, a digital Chinese yuan backed by the central bank which is currently undergoing research and testing.

China has previously cracked down on the development of financial technologies, preventing financial technology company Ant Group from providing cryptocurrency services and restricting mining activities. President Xi Jinping has also pushed for more aggressive regulation of China’s larger tech industry, with the country making a law in August severely restricting how tech companies are able to collect and use personal data.