The Chinese Communist Party must have been busy lately, especially with regard to new technologies.The country is one of the largest cryptocurrency markets in the world, but the government has long been skeptical of Bitcoin and similar products, and Trading is officially banned in 2019 (Although it can continue by using foreign exchange). Now the CCP has gone further: The People’s Bank of China announced today that all cryptocurrency transactions are illegal.
The translated statement is short and not too sweet: “Commercial activities related to virtual currencies are illegal financial activities. [and] Seriously endanger the safety of people’s property. “It is clearly pointed out that engaging in such activities constitutes a crime and will be prosecuted, and it is also illegal for foreign websites to provide such services to Chinese citizens.
This has already happened: in May of this year, government officials publicly opposed the continuation of cryptocurrency transactions and warned traders that their investments would have no legal protection. In June, the CCP instructed banks and payment platforms to stop all transactions and issued a ban on the mining of cryptocurrencies.the latter Saw a huge shift Some cryptocurrencies are mined there, such as Ethereum (and a large number of graphics cards suddenly appearing on the market), and now mainly in the United States (although Currently 8.5% of Ethereum is still mined in China).
Therefore, we may see another shift in the next few months, because despite the restrictions, China has so far been such a large cryptocurrency market (cheap electricity and cheap electronics are an unparalleled combination).Cambridge University Bitcoin Electricity Consumption Index It is estimated that by April 2021, China will account for 46.04% of global Bitcoin production: in other words, although not as big as before, it is still an absolutely huge player.
In the short term, the value of various cryptocurrencies has plummeted, and the price of Bitcoin lost approximately £1,500/US$2,000 (approximately 10% of its value in a week). But volatility is volatility, and in the long run, what this decision means for cryptocurrency is anyone’s guess-these are uncharted territory.
Dealing with the CCP is not on the to-do list of any reasonable person. Those who have the money to run these businesses have the money to run them elsewhere. The CCP’s reasoning has always been that cryptocurrency is an unpredictable and stupid investment as well as a means of money laundering. Whether the government can effectively regulate cryptocurrency from its society is now an ongoing experiment.