China's central bank requires Alipay and banks to crack down on cryptocurrencies

China's central bank has ordered Ant Group and four state-owned banks to step up its crackdown on cryptocurrencies, while Beijing intensifies its efforts to eradicate transactions involving bitcoin and other digital currencies.

China is getting tougher and cryptocurrencies are affected

The People's Bank of China (PBOC) said Alipay, Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Postal Savings Bank of China of Ant Group were among the financial institutions called for a meeting where they were urged to block payment services for all customer accounts deemed involved in cryptocurrency transactions. He was also told to stop offering other services such as account opening, registration and trading for any cryptocurrency related business.

"Cryptocurrency transactions and speculative activities have disrupted the normal economic and financial order," the PBOC said in a statement. "Risks of crimes such as illegal cross-border transfers of assets and money laundering are increasing, which seriously violate the security of property of the general public."

Alipay said in a separate note that it will set up a monitoring system to identify cryptocurrency-related transactions and any merchants who engage in such activities will be banned from the platform.

The four state-owned banks also vowed to step up their efforts to monitor cryptocurrency transactions and ban the use of their accounts in such businesses.

Collapse of the largest cryptocurrencies in the world

La quotation of major cryptocurrencies, including bitcoin, ether and dogecoin, plummeted after the news. Bitcoin's price fell to a two-week low on Tuesday, trading as low as $ 31.196 around 8:20 am Hong Kong time, according to CoinDesk.

According to some estimates, China accounted for up to 70% of the global cryptocurrency supply. The PBOC move marks the authorities' latest efforts to rid the country of cryptocurrency mining and trading, which will reorganize itself by moving somewhere other than China.

The Chinese province of Sichuan recently joined the list of jurisdictions seeking to eliminate cryptocurrency mining firms, along with Inner Mongolia and Xinjiang. 

Authorities in the province have ordered the closure of 26 companies suspected of being involved in cryptocurrency mining, state-run tabloid Global Times reported Monday. Officials also asked local power companies to shut off the power supply to cryptocurrency mining projects, the report said. Sichuan, which has abundant hydroelectric power, has been one of China's largest cryptocurrency bases.

Last month, China blocked a number of cryptocurrency-related accounts on the country's Twitter-like Weibo platform. It has also banned searching for some popular cryptocurrency exchanges like Binance and OKEx.