Bitcoin in China: What’s going on in the crypto community

[Karl_BC]

Hello, Bitcoin fans

In 2017, China’s Internet Finance Association stated that Bitcoin lacks legal foundations and to protect its people from the market’s volatility, China imposed stricter regulations on the industry. In the past few years, China has been one of the most active countries in shutting down crypto activities from mining to trading.

This 2021, the Chinese government intensified their crackdown on crypto with another warning against using cryptocurrency in trading. While there is no law in China that stops people from using cryptocurrencies, the government has cautioned the public about trading and mining cryptocurrencies.

Provinces in China drove out crypto mining companies with the ban issued in May 2021. In the same month, the People’s Bank of China (PBOC) published a warning saying that any activity related to the exchange of fiat money for cryptocurrencies, conducting token-based trading, and providing services to facilitate crypto trade will be charged with a criminal offence.

However, China isn’t the only country to pursue a crackdown on cryptocurrencies. Thailand and South Korea also shared their sentiments with China and issued their own warnings to crypto users and trading companies. In June and July 2021, the Bank of Thailand warned people against using cryptocurrencies for payments of goods and services.

As one of the biggest markets of cryptocurrency as well as the centre of most operations in crypto trading and mining, China plays a big part in the crypto industry. With the turbulent relationship of crypto with China and other Asian countries, the future of crypto in Asia is fogged with uncertainty.


Is it the end of Bitcoin in China?

China’s crackdown on crypto and especially on Bitcoin has been intense ever since the first issue in 2017. With China announcing that they will be working on their own digital currency, it became even harder for the crypto industry to break through and resume normal operations.

Cryptocurrency experts like Fred Thiel, CEO of Marathon Digital Holdings and a proud member of the Bitcoin Mining Council stated that the crackdown might be part of China’s effort to ensure the adoption of the upcoming digital currency created by their central bank. Another motivator could be that China is looking for a way to stem the capital outflow via cryptocurrencies and stable coins.

Thiel also said, ‘China’s government is doing everything it can to ensure that Bitcoin and other cryptocurrencies disappear from the Chinese financial system and economy.’ All of these are concerning for traders, miners and investors and it raises the question: Is this the end of Bitcoin in China?

As events continue to develop in China, the answer to that question is still unclear. However, Bitcoin is a well-established digital currency that pioneered decentralized operations in finance. Even with China banning crypto, it will be impossible for them to completely take it down. Of course, events in China can still affect Bitcoin’s value, but these can be easily reversed as the operations move offshore and traders deposit their crypto in overseas exchanges.

Over the whole debacle on the crackdown, Bitcoin has remained resilient, with operations that were halted in China only moving offshore. Despite all the regulations enforced on traders and users, Bitcoin continues to thrive in China. Instead of relying on RMB transfer, Bitcoin traders are now using the US dollar-linked cryptocurrency, USDT to buy Bitcoin and deposit it on overseas exchange, effectively trading Bitcoin. In a way, it became an underground currency instead of completely disappearing in the crypto scene in China.

Hope in the midst of a crackdown

Cryptocurrency is still not recognized as legal tender in most Asian countries. This is a concerning issue that can affect the marketability of crypto since it limits the use of cryptocurrencies on trade. Fortunately, there seems to be a light shining through the turbulent relationship between cryptocurrency and China.

During a panel hosted by CNBC on April 19, 2021, deputy governor of PBOC, Li Bo called Bitcoin an investment alternative for the first time since the crackdown. Although the regulatory framework that China has on crypto remains unchanged, the Chinese government’s statement on Bitcoin being an ‘investment alternative’ is definitely an improvement from the former ‘non-legal tender’.

To clarify, China still doesn’t recognise Bitcoin or any other cryptocurrencies as actual currency. However, the government is starting to acknowledge that it plays a part in the area of investments and now regards it as crypto-assets. Li Bo mentioned that China is still looking into crypto and what regulations they can apply to prevent risks of financial instability in the country.

Is it safe to invest in Bitcoin in Asia right now?

Bitcoin remains in the legal grey area for most countries. Some are still trying to figure out how to regulate cryptocurrencies in an effort to prevent any criminal transactions to be made in these decentralized platforms.

Even simply searching for crypto-related keywords will yield no result in the popular Chinese media outlet, Weibo. It is a difficult time not just for Chinese traders but also for the rest of the crypto community all over the world.

China has a prominent effect on the crypto market all over the world. With the country’s persistent crackdown on crypto, Bitcoin trading from major cryptocurrency exchanges fell by more than 40% in June 2021. The price of crypto also fell below the $30,000 mark within the same month.

Despite the devastating effect of the intense crackdowns by China, the crypto community around the world continues to persist and thrive. In China, crypto investors are finding new ways to trade without using RMB and the China-based crypto exchanges that were not able to get a license in China like OKE moved overseas to continue operations. Meanwhile, halted mining companies in China gave way for other mining companies in the world to thrive and pick up the slack.

Crypto might be under fire right now but as other countries reject the innovative and decentralized way of crypto, other countries like El Salvador are making Bitcoin an official currency, while USA, European Union, Canada and Australia have taken a positive stance in the development of crypto as an alternative exchange.


Thanks for reading and please share your thoughts on this topic.

Regards,
Karl


Source: Bitcasino blog

[momo3HC]

China act like this many times before. I`m not 100% sure but i think it won`t be the end of Bitcoin in China.

[TomPluz]

Bitcoin will continue to be traded and held by some Chinese people though it will never be the same as before. People in China are not as free as many in Western countries especially if there are issue they don't see eye-to-eye with the government. In China, they prefer to be silent so as to never be victimized by the powers-that-be. And so with this current set-up, it can be so hard to be dealing with cryptocurrencies especially if you happen to be just another ordinary guy like you and me, unlike if maybe you are a millionaire where you can easily get out of the country anytime you wish and conduct your crypto business elsewhere.

[mlawson71]

That the industry in China is crippled is clear. The question is whether any other country will become such a crypto hub as China was.

[vegasus]

Bitcoin condition is okay, no problem at all. Although in China, Bitcoin mining is prohibited, no other countries follow it. Instead, USA seems to make regulations that be more friendly with Bitcoin or crypto. I am sure that Bitcoin is always growing and the adoption be better day after day. We have more parties joining in Bitcoin investment and more popular people want to consider taking a part in crypto world.

[mlawson71]

Is it banned in the entirety of China or just in the Sichuan province?

[I-Bit]

China is a big country and its finetune to the crypto world is very high. But once more, CHina's ban on crypto has been since a long time ago and it is never changing. Moreover, we know that the FUD of banning crypto in China is allows to rise in order to make the market down again. We really know how this market is ongoing because there are big whales that can control the FUD and good news exactly

[TomPluz]

China is a big country and its finetune to the crypto world is very high. But once more, CHina's ban on crypto has been since a long time ago and it is never changing. Moreover, we know that the FUD of banning crypto in China is allows to rise in order to make the market down again. We really know how this market is ongoing because there are big whales that can control the FUD and good news exactly

I am hoping that the recent announcements on Bitcoin. crypto and mining bans can be the last in the series of the same thing. We are already tired of the China factor and I had been saying that this issue should be resolved once and for all so we all move on and never be again saddled by Chinese FUDs. We all love that Chinese people participate and become important players in the crypto market but we could not tolerate the stance by its government. The time has come for the whole crypto market to fully discount China, the sooner the better.

[therozaq]

Keep calm, mate.
Several investors confused with this issue.
But Issue is remaining issues, It will solved by the time.
China has own currency and market strategy.
I think Chinese government will launch their digital currency.
It's just my prediction.

[mlawson71]

China does have plans to launch its own cryptocurrency, it's not just a theory -they have been testing it for quite a while now, in different regions, including a joint use with Hong Kong. Its fullscale launch is likely a matter of time and I, personally, am convinced this had to do a lot with their crackdown on independent cryptocurrencies. The Chinese authorities don't want competition they cannot control.

[Mrkadir85]

I think China will never completely ban cryptocurrency in that country.  The Chinese government is likely to introduce their own cryptocurrency currency in their country.  China will never compete with other countries for cryptocurrency because it cannot be controlled comprehensively.  We may see in a few days that China has introduced its own currency.

[Beattysuhita]

China is a smart country, with technological developments in all fields very rapidly. Of course, China sees the potential of this cryptocurrency very well, so they have their own way of doing whatever it takes to make a profit. I am sure, China will make a surprise in this Cryptocurrency world.

[Tamsialu$$]

Cryptocurrency is most commonly used in China.  One thing I have noticed is that when China bands cryptocurrencies, the cryptocurrency market goes down a lot.  That's when the Chinese government bought it, and a few days later when they spoke positively about the nature of the cryptocurrency market pumping again.

[Nostoman]

In my opinion, the condition of Bitcoin is fine now. Because the price of Bitcoin dropped a lot due to some negative news. Again the price of Bitcoin has started to bounce upwards. So the price of Bitcoin may rise further, if there is no negative news in the next few months. Then Bitcoin will reach $100k. So I think there are people in the crypto community, None of them should wait.

[Senin]

China does have plans to launch its own cryptocurrency, it's not just a theory -they have been testing it for quite a while now, in different regions, including a joint use with Hong Kong. Its fullscale launch is likely a matter of time and I, personally, am convinced this had to do a lot with their crackdown on independent cryptocurrencies. The Chinese authorities don't want competition they cannot control.

It has long been written that the Chinese government will officially put into circulation its digitized yuan for the Winter Olympics. Therefore, before this event, they announced a ban on transactions in cryptocurrency, so that there were no possible competitors in the digitized yuan. However, I am surprised that no normative acts or even laws have been adopted on this matter. So far, there is only an appeal from the People's Bank of China, and this is clearly not enough for such a serious step.