Recap of China’s Crypto Ban In 2019

It is well-known that China has attempted to combat and ban cryptocurrency trading in the country since 2017. This year has seen increasing interest in digital coins resulting from popularity of blockchain technology. This article presents a short summary of China’s current state of affairs regarding crypto and changes it has seen in 2019.

China’s ban does not tolerate cryptocurrency trading

According to the reports published in September 2017, domestic cryptocurrency exchanges were forced to cease operations. In several weeks more negative news surfaced. China was going to eliminate not only commercial exchanges but all cryptocurrency and Bitcoin trading in the country.

In 2018 anonymous sources reported that Chinese government decided to take action against online platforms and mobile apps offering exchange-like services related to cryptocurrencies.

When the clampdown on domestic crypto industry was finished, China moved on to blocking offshore platforms that enable centralized trading.

The Great Firewall was not much effective, though: Chinese traders started to use VPN services to bypass it.

In November Shenzhen authorities discovered 39 exchanges which broke the ban on cryptocurrency trading and took appropriate measures against them.

China says No to Bitcoin, yes to blockchain

Despite its outright intolerance to cryptocurrency, China embraces the underlying blockchain technology. President Xi Jinping even stressed on its development as a priority.

Interestingly, after this claim the state-run Xinhua News Agency called Bitcoin ”the first successful application of blockchain technology”.

Chinese government is indeed worried about blockchain stimulating the interest in cryptocurrencies. According to the reports published at the beginning of this week, local companies were warned that the war on cryptocurrency trading will be continued. This month China also announced its plans on reforming forex markets which may indicate changes in treatment of digital coins again.

In general, China seems to be attracted by the safety of blockchain, but decentralization and lack of control which result in speculations contradict with their policy.

Recently head of the People’s Bank of China’s digital currency research institute Mu Changchun said that, unlike Bitcoin, digital yuan will not be intended for speculation.