China has repeatedly announced crackdowns on cryptocurrency and it is the 19th timeÂ since 2013. Its central bank has lately issued two documents. One is related to the outlawing of crypto mining and a follow-up of a previous crackdown. The second released document states cryptocurrency transactions are illegal in the country and companies providing the service to Chinese citizens are classified as being associated in illicit activity.
Several crypto wallets and exchanges have announced to halt services in mainland China and have started blocking Chinese IP addresses. They have taken a cautious approach now.
Meanwhile, it is yet to be seen whether the citizens feel threatened by the new warning, which also targets the Chinese people working for crypto companies in other countries stating their work is to be considered illegal and they may risk investigations. Cryptocurrencies including Bitcoin are greatly unregulated and are borderless. China has continuously ramped up its repression in the segment and plans to come up with its official cryptocurrency. The government has lately restated the new 14th five-year plan.
Meanwhile, industry experts argue the ban is a non-story for crypto enthusiasts and DeFi is truly decentralized. This is the reason it will stand strong against the new law. The sector is over, as of now, in the country. Traders are moving underground.
Cryptocurrency is a digital currency and decentralized. It is not under the direct control of any government, bank or agency. Bitcoin is the first cryptocurrency and was launched in 2009. It is currently the largest cryptocurrency in the world with respect to market capitalization. The other popular cryptocurrencies are Litecoin, Ethereum and Dogecoin. Prices of these jumped several folds during the COVID-19 pandemic.
Several countries have banned cryptocurrencies while Bitcoin in Ecuador is considered a legal tender. It is yet to conclude whether the segment would change the financial industry in the near future.