WAR BETWEEN CHINA AND BTC: WHY HAS CHINA ‘BANNED’ CRYPTOCURRENCY?
CHINA has intensified its campaign against cryptocurrencies like bitcoin, Ethereum, and others, attempting to limit trading and mining. What is the reason for China’s cryptocurrency ban?
China has lately imposed new regulations on cryptocurrencies in general, not just on prominent players like Bitcoin and Ethereum. In May, the cryptocurrency market fell as China’s booming sector was severely restricted by Chinese financial authorities, as well as Tesla CEO Elon Musk’s move against Bitcoin. China has now taken a step further in its anti-trading and anti-mining measures, banning a number of cryptocurrency-related accounts on the Chinese social media platform Weibo.
China has not outright banned cryptocurrencies, but it has taken steps to severely restrict them.
The main reason for this appears to be that Chinese law does not protect merchants, prices are readily manipulated, and virtual currencies are not backed by “real value.”
Three Chinese industry authorities said in a joint statement in May that under the restriction, such institutions, including banks and online payment channels, must not give clients any cryptocurrency-related services, such as registration, trading, clearing, and settlement.
The National Internet Finance Association of China, the China Banking Association, and the China Payment and Clearing Association are the three industry organizations.
“Recently, cryptocurrency values have surged and plunged, and speculative cryptocurrency trading has rebounded, gravely jeopardizing the protection of people’s property and disturbing the normal economic and financial order,” they said.
The restriction came after a global bitcoin bull market, which resurrected cryptocurrency trading in China.
A bull run, also known as a bull market, occurs when values in a financial market continue to climb or are predicted to rise.
Although crypto exchanges and initial coin offerings have been outlawed in China, individuals are still allowed to keep cryptocurrency.
This isn’t the first time China has imposed crypto market limitations.
China banned Initial Coin Offerings (ICOs) in September 2017 in order to protect investors and reduce financial risks.
Cryptocurrency trading platforms were also prohibited from changing legal money (cash) into cryptocurrencies and vice versa under the ICO guidelines.
It prohibited financial firms and payment organizations from providing services such as account openings, registration, trading, clearing, or liquidation for ICOs and cryptocurrencies.
The People’s Bank of China then made a statement in June 2019 stating that it would prohibit access to all local and international financial markets. “Brinkwire News in Condensed Form.”