China is continuing to work to limit cryptocurrency speculation even a year after their “initial coin offering” ban.
That said, the country has decided not to stand in the way of blockchain development.
Domestic Cryptocurrency Limits
Chinese authorities have boosted the pressure they’re placing on domestic cryptocurrency activity over the last while.
Despite the fact that Beijing continues to support blockchain tech development, it continues to work against the progress of cryptocurrencies. The country is steadily raising limitations on digital currency speculation. This effort is occurring about a year after the country originally started banning sales within “initial coin offerings.”
China once dominated in bitcoin trading. Moreover, it still currently comprises a majority of the “mining” process through which the bitcoins are created. That said, rising regulatory scrutiny from certain markets have had an impact on the digital currency’s price. While some actions have sent the price skyward, others – such as the prohibition of the sale of new cryptocurrencies through ICOs early in September 2017.
China has essentially banned bitcoin-yuan trading within the country. Equally, South Korean, Japanese, and U.S. investors have started expressing a larger interest in bitcoin. Last December, the cryptocurrency’s price rose to a record high, above $19,000.
Occasionally, Chinese blockchain development efforts send their headquarter addresses overseas. This helps those companies to continue to take part in the cryptocurrency market. That said, it should be acknowledged that it does remain possible to trade among cryptocurrencies in China. One cryptocurrency can trade with another. The challenge is in obtaining the digital coin in the first place when trading with yuan. This remains a common practice, despite the government’s efforts.
Beijing has not failed to noticed the ongoing speculation in China. Five government bodies came together at the end of last month to issue a warning. These bodies included the Banking Regulatory Commission, the People’s Bank of China, the Central Cyberspace Affairs Commission, the State Administration for Market Regulation, and the Ministry of Public Security.
The warning from these agencies was designed to caution traders regarding the risks associated with illegal fundraising under the label of “cryptocurrencies” and “blockchain.”