Fri, July 19, 2024

How frequently has China banned cryptocurrency?


How frequently has China banned cryptocurrency?

In a continued effort to combat money laundering and fraud, the Chinese government increased its control over cryptocurrency exchange activity within its borders throughout the most of 2020. The PBoC announced its plan to blacklist more than 100 foreign websites that provide services for cryptocurrency exchanges in August.

The State Council’s request for the ban of crypto mining and  trading.  It signaled the start of the Chinese crypto industry’s challenges in 2021. Prior to this, the provincial governments of Inner Mongolia, Xinjiang, and Sichuan provinces—all of which were important centers for bitcoin mining. They had started to implement regulations that restricted the activities of BTC miners. Provincial governments started acting proactively to stop crypto mining after the State Council’s remarks. In order to explain the new restriction, regulators pointed to Bitcoin’s energy-intensive characteristics and how it imperils the nation’s environmental aims.

Bitcoin miners had a choice to either permanently shut down their operations. Or relocate to other crypto-friendly nations, which was similar to the effects of the crypto exchange crackdown in 2017. The global Bitcoin economy went into a recession. This was as a result of the fact that before the crackdown, China produced almost 50% of the world’s Bitcoin mining capacity. Over $50 billion worth of cryptocurrencies exited East Asian accounts. This was between 2019 and 2020, according to the Chainalysis Blockchain data platform.

The Most Recent Cryptocurrency ban

The government intensified its attack on cryptocurrency in 2021. China forbade institutions and businesses from offering services connected to cryptocurrencies in May and cautioned investors against speculative cryptocurrency trading. The National Internet Finance Association of China, the Clearing Association of China, and the China Banking Association and Payment. They were unequivocally stating that providing services including registration, clearing, settlement, and trading are things that they would not  permit.

Government authorities also warned consumers that they would not protect them if they traded in bitcoin and other virtual currencies in an effort to exert more pressure on the sector. The government enforced bans on cryptocurrency mining in June and instructed banks and payment systems to stop facilitating transactions. In September, two documents were finally  public.

The exchange of legal tender for virtual currency, the purchase or sale of virtual currency (including sales of virtual currency to citizens of China), and the provision of information on virtual currency (including technical support and pricing services) are currently regarded as prohibited.

The current restriction aims to better detect and probe bitcoin trading behavior by combining offline and online inquiry. Financial institutions are prohibited from offering services for cryptocurrencies, such as account opening, money transfers, and other actions that make using cryptocurrencies easier. The use of cryptocurrency as a form of payment is also prohibited by websites and online businesses. Additionally, cryptocurrency advertisements are not allowed, and terms associated with them are tracked.

Chinese cryptocurrency mining also experienced severe losses. In September 2019, China reported using 75% of the energy used globally for Bitcoin. By April 2021, this figure had dropped to 46%. The country saw the closure of some businesses. The manufacturer of Bitcoin mining equipment Bitmain no longer sells to Chinese miners.


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