Hong Kong (CNN Business) – Bitcoin sank Monday as China ramped up its crackdown on cryptocurrencies by further slowing mining activity and telling major payment platforms and lenders that cryptocurrency trading would not be tolerated.
Bitcoin is down 9% over the past day to trade at around $32,700 per coin, its lowest in two weeks, according to Coindesk. Prices stabilized a bit on Tuesday, but the cryptocurrency is still losing about half its value since hitting an all-time high in April.
Other cryptocurrencies were also affected by the big sell-off on Monday: Ethereum fell about 14% while Dogecoin sank as much as 41%, erasing all of its gains since April.
Cryptocurrencies have had a rough two months for a number of reasons, including concerns about the environmental impact of coin mining and increased government scrutiny.
Cryptocurrencies continue to receive a lot of pressure from China, which for months has been signaling a more aggressive push to reduce the use of such currencies.
The People’s Bank of China said on Monday it had summoned Alipay, the popular online payments platform operated by Jack Ma’s Ant Group, along with five major lenders, asking them to “carefully investigate and identify” cryptocurrency exchanges and merchants for it. Cut off any cryptocurrency trading.
“Cryptocurrency trading and speculative activities … create risks of cross-border transfers of illegal assets and money laundering,” the central bank said.
The lenders include the Industrial and Commercial Bank (IDCBY), the Agricultural Bank of China, the China Construction Bank (CICHF), the China Postal Provident Bank, and the Industrial Bank.
All six companies said in statements released after the central bank announced that no institution or individual can use their platforms for any activity related to cryptocurrency. In addition to these comments, Alipay has also pledged to step up investigations against crypto transactions on its platform.
The announcement is not a new policy for Beijing, but it does reinforce the extent to which the country is willing to go to restrict the use of bitcoin and other digital currencies.
Over the weekend, Chinese state media reported that southwest China’s Sichuan Province has ordered a halt to all crypto-mining operations and cut off power supplies to several mining facilities. The county is a major hub for mining, the process of using powerful computers to run and solve algorithms that generate new digital currencies and verify transactions.
While China does not completely ban cryptocurrencies, regulators declared in 2013 that bitcoin was not real currency and banned financial and payment institutions from dealing with it. At the time, they cited the dangers of using bitcoin for money laundering, as well as the need to “maintain financial stability” and “protect the yuan’s status as an official currency.”
The growing crackdown is also aimed in part at boosting China’s state-backed digital yuan initiative, which the authorities want to implement in order to keep money flows in check.