While financial institutions and especially central banks have not stopped warning about the dangers of virtual currencies, China is driving the point home with a new statement. The Chinese central bank has declared all cryptocurrency transactions illegal.

The crackdown on cryptocurrency trading is taking a new turn in China. The Chinese central bank classifies cryptocurrencies as illegal activity and promises to eradicate "illegal" activities for both bitcoin and other virtual currencies and to ban cryptocurrency "mining" nationwide. The People's Bank of China said cryptocurrencies should not circulate in markets as traditional currencies and foreign stock exchanges are not allowed to provide services to mainland investors via the Internet. At the same time, Beijing, which has been testing payment by e-yuan via mobile phone since March, has very big ambitions behind it. Ten Chinese government agencies, including the central bank as well as banking, stock and exchange regulators, said in a joint statement they would work closely together to maintain a "high-pressure" crackdown on speculative activities by cryptocurrencies.