China has cracked down on cryptocurrency. But is this crackdown any different from its previous attitude toward the cryptocurrency market? While the crackdown aims to prevent financial crime, it also promotes blockchain technology. What are the implications for investors? Let’s take a closer look. Is it the start of the end for crypto in China?
China’s recent crackdown on cryptocurrency isn’t all that different from the country’s previous stance on crypto
China’s recent crackdown on cryptocurrency is not all that different from the country’s previous attitude towards the technology. The country declared cryptocurrency mining illegal and banned all transactions related to the technology. Mining involves vast computer networks competing to create new crypto tokens. This action caused a sharp drop in Bitcoin, which fell as much as 7 percent to $41,100.
The country is concerned about the growing popularity of cryptocurrency, as it challenges its economic stability. To counteract this, the central bank has increased enforcement of existing regulations aimed at protecting the economy from the volatility of crypto. However, this recent crackdown is not that different from the previous stance of China on cryptocurrency. In fact, the government’s crackdown has largely been a reiteration of the regulations it implemented in 2013 and 2017.
The recent crackdown on cryptocurrency comes as governments across the globe coalesce around their official stances on digital assets. The United States has also recently banned bitcoin and other digital assets. While China’s latest crackdown is not a surprise, it doesn’t seem to be much different than the country’s previous stance. In addition to cracking down on cryptocurrency, China has banned overseas exchanges from providing services for it.
It aims to curtail financial crime
President Obama’s executive order aimed to combat financial crime has become a critical reading for financial crime compliance professionals. It is a broad document that brings together dozens of government agencies. It details a number of critical strategies in the virtual value space, including efforts to combat financial crime, cybersecurity, and sanctions. Among them are efforts to ensure that consumers are safe from securities scams and other financial crimes.
The executive order includes a number of short-term and long-term goals. These include filling regulatory gaps and spurring greater global partnerships to better track funds. The executive order also aims to improve transparency and trace funds in the virtual and real worlds. Nevertheless, the government must do much more.
Its goal is to prevent people from using the digital yuan for illegal activities. Besides, the government would be able to better track spending through the digital yuan. Ultimately, this would help curb the influx of capital from the country.
It promotes blockchain technology
China is promoting blockchain technology in a number of ways. The country has identified 15 pilot zones to develop the technology. These include the cities of Guangzhou and Chengdu, as well as areas in southern Guangdong province and Sichuan province. It has also selected 164 entities to conduct pilot projects in these areas.
As the world becomes increasingly digital, the importance of blockchain technology has grown and China is now taking an active role in the development of the technology. Last week, the People’s Bank of China (PBoC) stated that blockchain technology can help resolve trade finance sector imbalances and resolve trade authenticity issues. In addition, the country is working to expand its semiconductor capabilities.
China is also pushing forward the development of its own digital currency. The e-CNY has recently passed several trials. It is one of the pioneer countries in developing central bank digital currencies.
It bans bitcoin
The recent news about China banning Bitcoin has caused a stir in the crypto community. While some articles have just reiterated old information, others have said that this is a real threat to the cryptocurrency industry. However, the Chinese government is not the only agency that has banned crypto. Financial institutions are also prohibited from offering services to crypto investors.
The People’s Bank of China has warned citizens against conducting business related to the virtual currency. They claim that such activities are illegal and endanger people’s assets. As a result, people involved in such activities face prosecution and can be imprisoned. Some prominent Chinese individuals are also concerned about their safety.
However, the Chinese government’s latest crackdown has gone much further. While previously the CCP left the enforcement of crypto to civil agencies, it now involves the highest law-enforcement bodies such as the Public Security Bureau and the Supreme Court in the crackdown. This has further pushed cryptocurrency activities into the criminal arena. Now anything involving cryptocurrency is considered a financial crime in China.
