China is the most talked about and influential nation in the entire cryptocurrency industry. It is still the home to the largest number of cryptocurrency miners. The rise in popularity of cryptocurrencies within the Chinese province had inflated to such an extent that the authorities had to clamp down on crypto regulations and ultimately deemed cryptocurrencies to be illegal.
Ever since their ban on cryptocurrencies, the Chinese authorities had been devising plans to launch their state-backed cryptocurrency. The stable coin dubbed the Digital Currency/ Electronic Payments System (DCEP) is closest to being the first hyped national cryptocurrency even though Venezuela’s Petro actually holds this title.
The crypto community was once led to believe that China was actually out to adopt cryptocurrencies as a whole, when Chinese President Xi Jinping made a bullish announcement about China and how the nation should focus on blockchain as a core technology and work to develop it.
The entire crypto industry saw this as a glimpse of positivity from china considering the fact that it came from the nation’s president himself. The crypto market responded with an upward rally with Bitcoin seeing the highest intraday gain since 2011. Even the Chinese A-Share firms that were related to blockchain-technology hit the daily limit of 10% to per cent.
Before the market was could recover from the green the Chinese state media curbed the excitement and warned crypto enthusiasts to not “speculate” as Beijing’s support for blockchain wasn’t a boost for cryptocurrencies.
Soon after, President Jinping confirmed China’s negative stance towards private cryptocurrencies when we went live on local channel CCTV1 and thrashed cryptocurrencies and addressed it as “financial fraud”, and illegal Ponzi Schemes.
And it’s not just words with China; they have been cracking down on anything that doesn’t fit within the bounds of their crypto regulations and putting an end to it. Recently, the authorities pulled down the curtains on local crypto exchange BISS and even arrested 10 people that were supposedly involved in the operation. The news was reported by local media outlet Sohu.
Surprisingly, on the same day Dovey Wan, founding partner of blockchain-based investment company Primitive Ventures told on twitter that the incident actually happened 2 weeks ago but was published much later. She also noted that the exchange was quite a reputable one stating:
“It’s a relatively known up-and-rising exchange.”
This was one of the few crypto-related businesses that the Chinese authorities have blocked. Previously there were rumours surrounding Chinese authorities raiding Binance and Bithumb’s Shanghai offices. The rumours were however disregarded due to the lack of facts but still managed to get the market to react negatively.
For now, China is not likely to be lifting the ban on cryptocurrencies but one thing for sure is the fact that it won’t refrain itself from utilizing blockchain technology in various sectors to strengthen its economy and give the United States a run for its money.