The clampdown comes as China’s central bank has been testing its own digital currency. The price of Bitcoin dropped on the news.

China intensified its crackdown on cryptocurrency on Friday, declaring all financial transactions involving cryptocurrencies illegal and issuing a nationwide ban on cryptocurrency mining, the power-hungry process in which vast computer networks compete for newly created crypto tokens.

In a Q&A posted to its website, the People’s Bank of China said services offering trading, order matching, token issuance and derivatives for virtual currencies are strictly prohibited. Overseas crypto exchanges providing services in mainland China are also illegal, the PBOC said. The PBOC said it has also improved its systems to step up monitoring of crypto-related transactions and root out speculative investing.

Recall that, China has in the past been a popular site for mining due to low electricity costs in areas like Inner Mongolia, but the country is currently experiencing an energy crisis and trying to become carbon neutral by 2050, a goal that cryptocurrency is making harder to meet. In 2019, China was home to 75 percent of the world’s Bitcoin energy consumption. That number dropped to 46 percent in spring 2021, and will likely drop even more sharply with the new restrictions announced on Friday.

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