- China banned cryptocurrency in China for good. It forbade financial transactions as well as crypto mining operations.
- According to the document, Chinese nationals who work for crypto-companies are considered illegal.
- Chinese citizens are being restricted by crypto companies.
The idea of cryptocurrencies goes against the government’s beliefs about a just and equal society. To counter the increasing hegemony of cryptocurrency in lower social systems, governments have imposed restrictions on cryptocurrency. China tried to restrict cryptocurrency development from the beginning, because it was incompatible with the Chinese government’s state-dominated economy. China banned cryptocurrency for good.
19th Time’s the Charm
China’s influence on the crypto market’s volatility had always been a concern. China has actively banned many sectors of crypto-related activities since 2013, culminating with the May 2021 ban on mining operations and financial transactions. In addition, on September 24th, the People’s Bank of China issued two documents outlining the illegality of crypto mining and associated transactions for Chinese residents.
China’s crypto ban process is still ongoing. A Business Insider report shows that China’s firewall has banned over 120 crypto platforms, including CoinMarketCap, TradingView, and CoinGecko. Chinese customers have been targeted by the IP blocking of crypto wallets, exchanges, and wallets, which has led to their suspension of operations. However, in an interview with The Block, CoinGecko’s co-founder, TM Lee, said that the company was not blocking customers “proactively.”
China is making everyone liable for services provided within its borders and enforcing restrictions. Alibaba (NYSE:), an e-commerce company, has prohibited all foreign sales of cryptocurrency mining equipment. Crypto becomes persona non grata and traders will find it difficult to liquidate their crypto assets.
Do They Have the Right Motives?
China’s crypto regulation was well-intentioned, as ICOs and many crypto-assets have spiraled into a speculative scheme. To a certain extent, crypto’s value resides in its decentralization and unregulated form; however, as more users entered the market, interactions were no longer equitable.
The value of crypto has multiplied beyond the capabilities of central monetary systems. China’s ambition to go carbon neutral in 2060 served as pretext for expanding the ban against cryptocurrency. To regain control over the currency, the government has been developing and testing the digital eyuan. This counters the perception of absolute authority.
Colin Wu, a Chinese journalist covering blockchain and crypto developments in the country, noted that “many Chinese users will flood into the DeFi world,” because digital assets are still lingering in users’ wallets, which suggests that existing policies might not suffice to usher in complete network control. Colin Wu notes that “more policies against cryptocurrencies are coming,” illustrating that Chinese authorities are more than serious about the current path they’ve taken.
- Although Blockchain is widely considered an essential technology, China decided to ban cryptocurrency and Bitcoin.
- Recent months have seen a reduction in crypto activity in Mainland China.
- Asia has seen a decline in crypto transaction volume.
China FUD: No more
There are many questions unanswered after China left the cryptocurrency space. Winston Ma from New York University said there was still uncertainty over the Notice of Implementations. He argued that public companies with a high level of compliance should negotiate their crypto exit.
Chinese authorities seem to have ignored centralized control. With Evergrande posing a threat to local and global economies and Bitcoin challenging financial sovereignty in the country, there is more pressure to conclude the testing period for the e-yuan, which will offer “surface-level convenience of cryptocurrency,” without decentralization and anonymity.
While China’s stance towards crypto is degrading, many believe the U.S should counter its approach and embrace cryptocurrencies with mild regulatory inputs. Venture capitalist Katie Haun told CNBC that “this is an opportunity for the United States,” because it has an opportunity to gain control of an innovative and disruptive market. This means that fear about Chinese centralization is now shifting to the opposite side of the globe.
What are the reasons to care?
Because China has already established a precedent for banning Bitcoin in recent months, negative news does not have a significant impact on Bitcoin. National, or even global, regulation can have a direct impact on the stability of Bitcoin’s decentralized network as it becomes a worldwide financial instrument.
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