Bitcoin has dropped to a low of $31,780.79 on Monday amid fears that a crypto crackdown launched by China is going to be even harsher than first feared.
Beijing announced that it has summoned several banks and financial institutions urging them to ramp up their efforts to identify those participating in bitcoin transactions, and rapidly cut off their access.
A statement by the People's Banks of China added:
" Speculative trading in virtual currencies tools economic and financial order spawns the risks of criminal activities such as illegal asset transfers and money laundering and endangers people's wealth."
State-owned banks including the industrial commercial Bank of China, as well as the Popular payments platform Alipay, we're among the business meeting.
China's crackdown appears to have led to a significant decline in bitcoin's hash rate or processing were which has fallen sharply in the last month, according to data from Blockchain.com An estimated 65% of global Bitcoin mining is done in China.
Bitcoins network is decentralized, meaning it doesn't have any central party or middleman to approve transactions or generate new coins.
Instead, the blockchain is maintained by miners who race to solve complex math puzzles using purposed build computers to validate transactions whoever wins that race is rewarded with bitcoin.
This power-intensive process has led to growing concerns over the potential environmental harm of bitcoin, with the lines of Tesla CEO Elon Musk and U.S. Treasury Secretary Janet Yellen raising the alarm. China where most bitcoin mining is been done relies heavily on coal power. Last month, a coal mine in the Xinjiang region flooded and shut down, taking nearly a quarter of bitcoin's hash rate offline.
However, miners in China 🇨🇳 often migrate to places like Sichuan, which are rich in hydropower in the rainy season. And some industry efforts have been launched including the Bitcoin Mining Council and The Crypto Climate Accord in an effort to reduce cryptocurrencies carbon footprint.
Bitcoin has fallen by about 20% in 24 hours after it failed to retain the all-important level of $40,000.
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