Over the last year, the cryptocurrency market took a series of heavy drives in the Chinese government. The market lackluster performance in 2018 pales in comparison to its stellar thousand-percent gains in 2017.
Since 2013, the Chinese authorities have taken steps to govern cryptocurrency, but nothing in comparison to what has been enforced in 2017. (Check out this article for a comprehensive analysis of the official notice issued by the Chinese government) sumokoin
2017 was a banner year for its cryptocurrency market with all the attention and expansion it has attained. The extreme price volatility forced the Central bank to adopt more extreme measures, including the ban of initial coin offerings (ICOs) and clampdowns on domestic cryptocurrency exchanges. Shortly after, mining factories in China were forced to close down, citing excessive electricity consumption. Many factories and exchanges have relocated overseas to avoid regulations but remained available to Chinese investors. Nonetheless, they nevertheless don’t escape the claws of the Chinese Dragon.
In the most recent series of government-led attempts to monitor and ban cryptocurrency trading among Chinese traders, China expanded its”Eagle Eye” to track foreign cryptocurrency exchanges. Companies and bank account suspected of carrying out transactions with overseas crypto-exchanges and related actions are exposed to steps from limiting withdrawal limitations to freezing of accounts. There have even been ongoing rumors among the Chinese community of extreme steps to be enforced on international platforms that allow trading among Chinese investors.
“As for whether there will be further regulatory steps, we’ll have to await orders from the higher authorities.” Excerpts from a meeting with staff leader of the China’s Public Information Network Security Supervision agency under the Ministry of Public Security, 28th February
Imagine your child investing their savings to invest into a digital product (in this case, cryptocurrency) he or she does not have any way of verifying its authenticity and value. They may get lucky and strike it wealthy, or lose it all when the crypto-bubble burst. Now scale that to a huge number of Chinese citizens and we are talking about billions of Chinese Yuan.
The sector is filled with scams and pointless ICOs. (I’m sure you have heard information of individuals sending coins to arbitrary addresses with the guarantee of decreasing their investments and ICOs that just don’t make sense). Most unsavvy investors are in it for the money and would care less about the innovation and technology behind it. During the crypto-boom in 2017, take part in almost any ICO with either a renowned adviser onboard, a promising team or an adequate hype and you are guaranteed at least 3X your investments.
A lack of understanding of the firm and the tech behind it, together with the proliferation of ICOs, is a recipe for failure. Members of the Central bank accounts that nearly 90 percent of the ICOs are fraudulent or involves illegal fundraising. In my view, the Chinese government wants to make certain that cryptocurrency stays’controllable’ and not too large to fail within the Chinese community. China is taking the proper steps towards a more secure, more regulated cryptocurrency planet, albeit aggressive and controversial. In reality, it might be the ideal move the nation has taken in decades.
Will China issue an ultimatum and earn cryptocurrency prohibited? I strongly doubt so because it is pretty useless to do so. Currently, financial institutions are prohibited from holding any crypto assets while people are allowed to but are prohibited from carrying out any kinds of trading.
In the yearly”Two Sessions” (Named because two big parties- National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPCC) equally get involved in the forumï1/4held to the first week of March, leaders congregate to discuss about the latest issues and make mandatory law amendments.
Wang Pengjie, a member of the NPCC dabbled into the prospects of a state-run digital currency trading platform in addition to initiate educational jobs on blockchain and cryptocurrency in China. However, the proposed platform would require a authenticated account to permit trading.
“Together with the establishment of related regulations as well as also the co-operation of the People’s Bank of China (PBoC) and China Securities Regulatory Commission(CSRC), a controlled and effective cryptocurrency exchange system would serve as a formal method for businesses to increase funds (via ICOs) and shareholders to hold their digital assets and achieve capital appreciation” Excerpts of Wang Pengjie demonstration at the Two Sessions.