The Chinese government is on a campaign to clamp down on cryptocurrency trading and initial coin offerings (ICOs) in their country. In total, 124 offshore crypto exchange websites that offer services to Chinese citizens are being blocked across China. Considering there are only 206 crypto exchanges listed on CoinMarketCap, this might be all of the crypto exchanges in the world that haven’t already taken steps to ban Chinese citizens from their platforms.
The South China Morning Post believes the main reason China is doing this is that it believes cryptocurrencies are a cause of financial instability.
Further, Chinese authorities are going to be monitoring the internet for cryptocurrency trading and ICO activity, and progressively expanding their ban list. This will include monitoring social media and chat apps, like WeChat, to make sure that no one is trying to trade cryptocurrency peer to peer.
China began efforts to wipe out cryptocurrency trading by banning all crypto trading for the Chinese yuan (CNY). Before this ban, most of the Bitcoin trading in the world was conducted in China on exchanges such as Huobi, OKCoin, and Binance. So far, 88 cryptocurrency exchanges and 85 ICOs in China have been shut down.
Before the ban, CNY comprised 90% of global fiat to Bitcoin trading, now it is less than 1%, and any trading of Bitcoin for CNY that is occurring is illegal. This has caused a massive shift in the global Bitcoin trade. Now, Bitcoin trading is more decentralized and many different countries have major Bitcoin exchanges.
Now that cryptocurrency trading and ICOs are illegal, the next logical step would be to ban mining.
However, the People’s Bank of China, the central bank of China, is developing a national cryptocurrency, so perhaps this is not the end of crypto in China. Some speculate this is just an effort to create a crypto vacuum before launching an official Chinese crypto, which would help optimize conditions for the new crypto to become tremendously profitable.
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