Bitcoin futures are crashing again to close out the trading week, driven by China calling for additional regulations on mining and the overall cryptocurrency market. Beijing has been the cause of the crypto market’s bloodshed this week, in addition to Tesla Motors CEO Elon Musk sending mixed messages about his support for the premier digital currency.
June bitcoin futures plummeted $3,185, or 7.90%, to $37,135.00 per coin at 17:06 GMT on Friday on the Chicago Mercantile Exchange (CME). Bitcoin prices have cratered 25% this week, paring their year-to-date rally to below 28%.
For the second time this week, Chinese authorities called for enhancing the government’s efforts to clamp down on mining and cryptocurrency trading. Chinese Vice Premier Liu He and the State Council demanded tighter regulation to protect the financial system.
According to Beijing, cracking down on bitcoin is necessary to “crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”
The central government is concerned that bitcoin could threaten the stock, bond, and foreign exchange markets and facilitate illegal activities.
This comes a couple of days after the People’s Bank of China (PBoC) issued a statement announcing that bitcoin and other digital tokens would be restricted from being used as a form of payment, clarifying that they are not real currencies. The latest regulations from the central bank ban banks and other payment institutions from offering clients services, like clearing and registration, involving cryptocurrencies.
The announcement annihilated the crypto market as bitcoin fell as much as 30%.
Meanwhile, the US Treasury Department announced that the government needs stricter crypto compliance with the Internal Revenue Service (IRS) as they pose tax evasion risks. The Treasury stated that it will require any transfer of more than $10,000 to be reported to the IRS.
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury said in a statement. “This is why the President’s proposal includes additional resources for the IRS to address the growth of cryptoassets. Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on.”
The Federal Reserve also confirmed this week that it intends to release a paper this summer highlighting the central bank’s intentions to create a digital dollar.
In other cryptocurrency markets, ether prices declined 9.02% to $2,451.72. Dogecoin plummeted 8.55% to $0.354. XRP decreased 10.62% to $1.03. Cardano dropped 9.67% to $1.57. Stellar fell 9.31% to $0.435115.