Over the past year, the cryptocurrency market took a series of heavy punches from the Chinese authorities. The marketplace lackluster performance in 2018 pales compared to its stellar thousand-percent gains in 2017.
What has happened?
Since 2013, the Chinese government have taken measures to regulate cryptocurrency, but nothing compared to what has been enforced at 2017. (Check out this article for a comprehensive evaluation of the official note issued by the Chinese government)
2017 was a banner year for its cryptocurrency marketplace including all the focus and expansion it has attained. The intense price volatility forced the Central bank to embrace more extreme steps, including the banning of initial coin offerings (ICOs) and clampdowns on national cryptocurrency exchanges. Shortly after, mining factories in China were forced to shut, citing excess electricity consumption. Many factories and exchanges have relocated overseas to prevent regulations but stayed accessible to Chinese investors. Nonetheless, they nevertheless fail to escape the claws of the Chinese Dragon.
In the latest series of government-led attempts to track and prohibit cryptocurrency trading among Chinese traders, China extended its”Eagle Eye” to track foreign cryptocurrency exchanges. Firms and bank account suspected of carrying out transactions with overseas crypto-exchanges and relevant actions are subjected to steps from limiting withdrawal limitations to freezing of accounts. There have even been continuing rumors among the Chinese community of extreme measures to be enforced on international platforms that allow trading among Chinese investors.
Imagine your child investing their savings to invest in an electronic product (in this case, cryptocurrency) he or she does not have any way of verifying its validity and value. He or she could get lucky and hit 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 moot ICOs. (I’m certain that you have heard information of individuals sending coins to arbitrary addresses with the promise of decreasing their investments and ICOs that simply do not make sense). Many unsavvy investors are in it for the cash and might care less about the innovation and technology behind it. During the crypto-boom at 2017, take part in any ICO with either a renowned advisor onboard, a promising team or an adequate hype and you’re guaranteed at least 3X your investments.
A lack of comprehension of the firm and the technology behind it, combined with the proliferation of ICOs, is a recipe for failure. Members of the Central bank accounts that nearly 90% of those ICOs are deceitful or involves illegal fundraising. In my view, the Chinese government would like to make sure that cryptocurrency remains’controllable’ rather than too large to fail within the Chinese community. China is taking the right steps towards a safer, more regulated cryptocurrency world, albeit competitive and controversial. In reality, it might be the ideal move the nation has taken in decades.
Will China issue an ultimatum and earn cryptocurrency illegal? I strongly doubt so because it’s pretty useless to do so. Currently, financial institutions are banned from holding any crypto assets while people are permitted to but are prohibited from carrying out any kinds of trading.
A State-run Cryptocurrency Exchange?
In the annual”Two Sessions” (Named because two major 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 on the first week of March, leaders flocked to discuss about the latest problems and make mandatory law amendments.
Wang Pengjie, a member of this NPCC dabbled in 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 searchable accounts to permit trading.
The March towards a Blockchain Nation
Governments and central banks worldwide have fought to grapple with the increasing popularity of cryptocurrencies, but something is certain, all have adopted blockchain.
Regardless of the cryptocurrency crackdown, blockchain has been gaining popularity and adoption in a variety of levels. The Chinese government have been supporting blockchain initiatives and embracing the technologies. In fact, the People’s Bank of China (PBoC) are operating on a digital money and have ran mock transactions with some of the nation’s commercial banks. It is still unconfirmed if the digital money will be decentralized and provide attributes of cryptocurrency like anonymity and immutability. It wouldn’t come as a surprise when it turns out to be only a digital Chinese Yuan given that anonymity would be the last thing that China desires in their country. However, made as a close replacement of the Chinese Yuan, the digital money is going to be subjected to existing monetary policies and legislation. know more coinmarkets.net click above the link