What's going on?

China announced on Friday that any and all crypto-related activities are now illegal in the country � period.

What does this mean?

China�s no fan of cryptocurrencies for a couple of reasons: their anonymity makes them ripe for fraud and other criminal use, and the sheer amount of energy it takes to mine them flies in the face of the country�s new eco-conscious stance. It�s made no secret of its beef with them either, having already banned commercial banks from providing crypto services in May.

But that�s small fry compared to what came on Friday, when it banned every crypto-related activity in the country, from investing to mining. That�s huge: China�s home to a massive proportion of the world�s crypto miners, and the country�s investors received crypto transfers worth $150 million in the first half of the year alone. This crackdown, then, will send both production and use plummeting, which might be why investors sent bitcoin�s price down 8% after the news landed.

Why should I care?

The bigger picture: If you can�t join �em, beat �em.
A more conspiratorial newsletter might argue this is China�s way of ousting the competition: the country�s central bank intends to release a digital currency of its own, and it�s planning to trial run it next year at the Beijing Winter Olympics (tweet this). The digital yuan will give the government more insight into exactly where money is going to and from in its financial system, but only if people actually use it�

Zooming out: Regulation, regulation everywhere.
Coinbase had been planning to launch its own new product last week � one that�d let users lend out their crypto and get paid interest in the meantime. It�s all part of the platform�s wider effort to diversify its revenue beyond trading fees, which rely all too heavily on volatility in the market. No such luck: regulators have been on Coinbase�s case so much that America�s biggest crypto platform decided against the launch altogether.