Bitcoin and other major cryptocurrencies fell after the People’s Bank of China reiterated that digital tokens can’t be used as a form of payment.
Bitcoin continued its slide as it fell as much as 7.3% to $40,139 in Asia on Wednesday.
Ether, Dogecoin and last week’s sensation, Internet Computer, also retreated.
Virtual currencies should not and cannot be used in the market because they’re not real currencies, according to a notice posted on the PBOC’s official WeChat account.
Financial and payments institutions are not allowed to price products or services with virtual currency, the notice said.
China since 2017 has abolished initial coin offerings and clamped down on virtual currency trading within its borders, forcing many exchanges overseas.
The country was once home to about 90% of trades but the lion’s share of mining and major players have since fled abroad.
China has recently taken steps to issue its own digital yuan, seeking to replace cash and maintain control over a payments landscape that has become increasingly dominated by technology companies not regulated like banks.
A fall to $40,000 would mark the first time since September that Bitcoin would test its average price over the past 200 days. And breaching it could mean it drops to $30,000, where it’s previously found support.