What are the implications?

China made cryptocurrency illegal. Well, again. Technically, the country banned Chinese banks from handling domestic and international transactions involving cryptocurrencies in 2013, and again in 2017, according to NPR and Reuters. But, for the first time, multiple agencies, including the People's Bank of China and "financial, securities, and foreign exchange regulators" have come together to "explicitly ban all cryptocurrency-related activity."

This includes mining—"solving computational problems which ... secure the network and process every Bitcoin transaction" (in exchange for Bitcoin)—as well as buying, selling, and trading. NPR wrote that "Friday's notice complained Bitcoin, Ethereum and other digital currencies disrupt the financial system and are used in money-laundering and other crimes."

The People's Bank of China stated on September 15, "Virtual currency derivative transactions are all illegal financial activities and are strictly prohibited." Meanwhile, NPR explained, "The People's Bank of China is developing an electronic version of the country's yuan for cashless transactions that can be tracked and controlled by Beijing."

So, what are the implications? 

First, and practically, both Bitcoin and Ethereum's stocks dropped this morning, with Yahoo! News reporting "Bitcoin tumbling 5.5% at $41,000, while Ether was down 8.4%, at $2,824 this morning." 

Second, and philosophically, since cryptocurrency can "allow anonymity and flexibility," according to NPR, "Chinese regulators worry they might weaken the ruling Communist Party's control over the financial system." What is being billed as a way to ensure "the safety of people's property" might well be another bid at cracking down on anything that weakens the Communist Party's hold on the country. 

Still, this isn't an isolated incident on the global stage. Reuters reports "a global cryptocurrency crackdown" with "governments from Asia to the United States (fretting) that privately operated highly volatile digital currencies could undermine their control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors." Reuters wrote, "They also worry that 'mining,' the energy-intensive computing process through which bitcoin and other tokens are created, is hurting global environmental goals."

We're curious to see how this pans out. Will Bitcoin and Ethereum go up again? Or will this be a harbinger for a larger crypto crisis? 

Let us know your thoughts in the comments.