Bank of China Posts Against Crypto Use on WeChat

The global financial market has entered a difficult period because of the Coronavirus pandemic. This could be the first financial crisis in the world since 1929 because of which people are looking at alternative forms of money.

Bank of China is anti-crypto

As the world is shifting its focus to cryptocurrencies, the Bank of China is doubling down on its anti-crypto narrative. On Sunday, the bank posted a long post on cryptocurrencies on its WeChat account titled, “3.15 Protection of Financial Consumption Rights and Interests”. The bank warned about investing in cryptocurrencies and talked about three prominent scams on cryptocurrency exchanges.

It wrote,

“First of all, the amount of fraud transactions with bots is serious. The average turnover rate of the top three overseas cryptocurrency exchanges is much higher than that of foreign licensed exchanges. Second, market manipulation exists in these exchanges where forced leveraged trading eventually causes the exchanges to explode. Third, money laundering is a big issue.”

It also noted that Bitcoin is not a safe haven. It is a very volatile asset and claims regarding its status as a safe investment are misleading. It urged people to protect themselves and avoid investing in digital coins.

China’s problem with cryptocurrency

Even though China is reportedly working on a cryptocurrency of its own, the country has remained highly abrasive of the crypto sector. It has cracked down on crypto establishments within the country, sent miners and crypto exchanges out and effectively made it difficult for people to buy and sell digital assets. Alipay also restricted Bitcoin and other crypto-related transactions on its platform last year.

Bitcoin markets have fallen steadily in the past month. In fact, crypto markets have wiped off $120 billion in the last 30 days, which accounts for 41.9% of their market capitalization. This kind of steep value deterioration was last seen in 2018 when the crypto bubble burst and the markets nosedived. Bitcoin alone lost 40% of its market cap, totaling about $71 billion.