The world is adapting to cryptocurrencies, yet China still outlaws it. With scams and other currency involved crimes being at such a high in China, especially in the capital Hong Kong, it was expected that China would view negatively towards the adoption of cryptocurrency. With the illegal activities like money laundering, you can be sure that in an unregulated market like China’s, virtual currency would cause havoc.
It is understandable why China bans cryptocurrency, but the question is when will the ban be lifted? Taken into a fact how many developers, traders, and merchants are affected by this ban, so it would be no surprise if China lifts the ban in the near future. Currently, the ban is still strictly enforced as a number of Bitcoin miners have been caught and trialled. Despite this though, we see that Bitcoin continues to break record highs.
CEO of Prosense, Stanislav Glukhoedov says that “maybe increased attention from governments can help clean up the ICO market from scammers and we suppose that in the near future the number of teams planning new projects through ICO mechanisms will be reduced, and those who will stay will be strong serious companies.”
Bloomberg stated that the beginning of July 2017, China had already 43 ICO companies within their borders. Experts of the Internet’s Financial Security also stated that 65 ICO projects had been completed, raising 2.6 billion Yuan. And according to Shanghai Security News, Chinese tech firms raised $766 million worth of cryptocurrencies within a mere 8 weeks. So the potential for China’s financial state to grow because of cryptocurrency is possible, the government just needs to see that the reward outweighs the risk.
As mentioned people caught mining for cryptocurrency have been caught and trialled, and because of this, the cryptocurrency community is appealing to lift the ban since China has some of the biggest miners in the world. China has a number of Bitcoin farms, where countless computers are set up to do around the clock mining. Even with legitimate mining companies such as Bitmain, China itself benefits from Bitmain’s operations as millions of Yuan are generated daily because of Bitcoin mining.
An Unstoppable Force
As other top countries such as Russia adopting cryptocurrency by improving and coming up with better regulations, it’s quite clear that cryptocurrency growth can’t be stopped, the one main reason is because cryptocurrency such as Bitcoin is globally and entirely digital, and because of the internet having no borders so does cryptocurrency also have freedom to transition globally.
The cryptocurrency experts around the world strongly believe that the cryptocurrency ban in China is just temporary and some even see the ban as just a “pause”. By pause, it means that the ban allows China to upgrade and improve their cryptocurrency regulations as well. By banning cryptocurrency, China can no implement more cryptocurrency friendly technology within their financial sector.
So since it’s just a matter of time when cryptocurrency is allowed once again in China, we wait to see what will be different. A lot can change but one of two things will certainly happen. Either China will allow cryptocurrency trade to happen with just more enforced regulations such as Bitcoin mining licenses being required to mine, the size of lots a cryptocurrency trader are allowed to trade and background checks on people involved in cryptocurrency. These enforced regulations will help the government to create a more controlled cryptocurrency framework within China.
The second possibility that might take place is China following Russia’s example and create their own centralized national cryptocurrency. This is very unlikely to happen but this is the best direction for China to move in if the government plans to control the entire cryptocurrency framework. If this does however happen it would cause trouble for a lot of financial sectors within the country as all exchanges will be shut down and merchants will feel the impact on their businesses.
But no matter what, China’s ban on cryptocurrency will be lifted and a more regulated market is to be expected. Luckily the events happening within China has no direct impact on the current Bitcoin market.