All Cryptocurrency transactions were made illegal last month by the People’s Bank of China and nine other organizations. It includes the public security department. Chinese users have been blocked off from trading platforms where investors may purchase and sell digital currency, creating a some form of cryptocurrency crisis.
This was part of a campaign that began earlier this year. In this particular plan, Chinese Authorities shut down the country’s power-hungry Bitcoin mining computers.It is a huge impact for a country that accounted for 90% of global Bitcoin transactions just five years ago. According to data source Chainalysis, computer farms in China mined about half of the World’s Bitcoin until this spring. Digital wallets in the country received $150 billion worth of cryptocurrencies in the first half of the year, second only to the United States.
Violation of Rules
As Crypto users, we know the crackdown in China shows an Authority Government’s limitless power against fundamental selling features of Cryptocurrencies. However, according to the Crypto concepts, the decentralized networks of computers that operate them are resistant to central authority control.
China restricted Cryptocurrency firstly in 2017. Then the digital trading hubs of the digital currency fled to the United States. Using loopholes, Chinese consumers were able to continue purchasing and trading Bitcoin with a few extra steps. However, the new rules have prompted websites and applications that serve them to take steps on their own to block off Chinese consumers.
While Chinese users still send Bitcoin to one another, showing Crypto investors’ faith in the currency’s distributed network of computers. Then the bigger question is “Whether they will continue to do so?” China has succeeded in restricting views that don’t suit the Chinese Government’s Vision.
Digital Yuan (e-CNY)
The Digital Yuan (e-CNY) arrived in the wallets of a few consumers after nearly eight years of development. The Central Bank distributes the Digital Currency (e-CNY) to consumers through six large Commercial Banks, usually through a Wallet App.
The PBOC’s (People’s Bank of China) establishment of the e-CNY meets two separate but linked objectives.
- The first, longer-term goal is to build a Digital Currency that can compete with Bitcoins, stable coins and other Central Bank Digital Currency (CBDC). It also guarantees that the Yuan remains China’s leading currency.
- The second purpose is to change China’s current payment system by introducing cash like Digital Payment Mechanism. It is accessible to all, low cost, anonymous (to some extent) and promotes competition among payment service providers.
Future of China (e-CNY)
The e-CNY will be most likely to be launched in 2022 following the Winter Olympics. The application of current e-CNY pilot programs is highly advancing.
Future of Crypto Rules in China
There is no evidence that China will lift or loosen its Cryptocurrency ban anytime soon. But recent moves reflect that the government wants to position China as a crypto leader. Statements by Chinese government leaders favouring Blockchain technology are among these moves.
According to research published by the Institute of International Finance, the Chinese government has also expressed support for the development of a Global Regulatory Framework for Cryptocurrencies.
- The discussion above is not financial advices, investment advices, or taxing. It is a basic study on the risks of cryptocurrency investing which is done based on resourcing sources.