China's central bank said on Monday that it had lately summoned certain banks and payment organizations, pushing them to tighten their stance on cryptocurrency trading.

The discussion between the People's Bank of China and organizations like the Agricultural Bank of China (AgBank) and Alipay occurred after China's State Council, or cabinet, promised last month to tighten down on bitcoin trade and mining.

The PBOC advised financial institutions to conduct comprehensive inspections on their customers' accounts to recognize people participating in cryptocurrency transactions and to immediately terminate their payment routes.

“Speculative trading in digital currencies disrupts economic and financial order, increases the risk of illicit activities including unlawful asset transfers and money laundering, and jeopardizes people's wealth,” the PBOC stated.

State-owned China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC), and Postal Savings Bank of China too were present at the PBOC meeting.

Bitcoin's worldwide Bull Run has rekindled speculative trading in China, where consumers buy cryptocurrencies using yuan through bank accounts or payment systems. Three industry groups imposed a ban on crypto-related financial services last month, although the entities are weaker than PBOC.

The PBOC has requested banks and financial companies to invest more in technology that would allow them to identify potential crypto-related transactions and get to recognize their customers.

Following the central bank's announcement, AgBank, ICBC, CCB, and Alipay all issued separate comments stating that they will undertake due diligence on the customer to uncover unlawful crypto-related activity and close suspicious accounts.

Prohibitions on crypto mining had been imposed in key bitcoin mining centres such as Sichuan, Xinjiang, and Inner Mongolia as China has stepped up its anti-cryptocurrency crusade in recent days.

China also has restricted a plethora of cryptocurrency-related social media profiles, and the ability to search for key cryptocurrency exchanges like Binance and Huobi on baidu.com and the Twitter-like site Weibo.

Bitcoin fell over 10% on Monday as recent volatility in the cryptocurrency market displayed little signs of abating, with market participants blaming the losses on concerns about China's growing crackdown on bitcoin mining in times of low liquidity.

Bitcoin plummeted as low as $32,094, its lowest level in 12 days, pushing down lesser currencies. It was down 8.3% on track for its largest daily decline in a month.

The world's largest cryptocurrency, troubled by volatility, has lost more than 20% in the previous six days alone and is down half from its April peak of about $65,000. Nonetheless, it has risen more than 10% this year.

The decline coincides with an increasing crackdown on cryptocurrencies in China, with officials in the southwest province of Sichuan ordering the closure of bitcoin mining operations on Friday. China's central bank said on Monday that it has recently summoned certain banks and payment organizations, pushing them to tighten their stance on cryptocurrency trading. The People's Bank of China had asked financial companies to immediately shut payment gateways for cryptocurrency trading. According to the PBOC, they must not provide any other crypto-related financial services.

The State Council, China's cabinet, pledged the previous month to crack down on mining and trade as part of a package of financial risk-control measures.

Mining data are scarce. Nonetheless, as per data from the University of Cambridge, China produced roughly 65% of the world's bitcoin last year, with Sichuan ranking second.

Companies that mine bitcoin, which is an energy-intensive operation, focus on maintaining significant stocks of the cryptocurrency, with any attempts to sell big quantities lowering prices.

“Crackdown on Chinese miners may indicate that they will be dumping currency into some kind of thin market and driving us lower,” said Ben Sebley of the London-based crypto company BCB Group. China's central bank said on Monday that it had recently contacted several banks and payment organizations, pressing them to tighten their stance on cryptocurrency trading.

The People's Bank of China has asked financial institutions to immediately shut payment channels for cryptocurrency trading. According to the PBOC, they should not provide any other crypto-related banking services.

Agricultural Bank of China (AgBank), China's third-largest lender by assets, stated that it would follow the People's Bank of China's guidelines and undertake due diligence on customers to weed out unlawful crypto mining and exchanges.

Smaller competitor ether, which moves in unison with bitcoin, fell upto 12%, going below $2,000 for the first price over a month.