See why China banned Cryptocurrency
After threatening to put bitcoin in a corner for months, Chinese regulators banned all cryptocurrency-related transactions in the country yesterday. Yep, it’s illegal to buy a Bored Ape NFT in China now.
The backstory: Chinese authorities have been squeezing crypto’s influence in the country since Kendall Jenner’s Pepsi commercial. In 2017, they outlawed cryptocurrency exchanges from operating within China’s borders, and major platforms like Huobi were forced to stop, drop, and relocate within months of the announcement. And this June, China imposed restrictions on mining—a process that involves a network of energy-glugging servers creating new crypto tokens.
But China’s crypto crackdown had several, well, cracks that yesterday’s statement sealed up:
Chinese residents can no longer trade crypto on peer-to-peer platforms like WeChat Pay and AliPay (the Venmo and Zelle of China).
Mining cryptocurrency is now completely illegal.
The order reiterated a pre-existing ban on overseas exchanges conducting transactions within China.
Why is China’s government so bearish about crypto?
China’s main grievance is that cryptocurrencies are unregulated by any higher authority. Some argue that this facilitates illegal activities like money laundering and allows money to leak out of the country without documentation.
Plus, China’s not exactly known for its laissez faire governing style. It’s been on a regulation spree this year, from limiting kids’ online gaming to kicking ride-hailing company Didi off app stores.
Not to mention, the country’s central bank has been testing its own digital currency, the digital yuan. Having an official digital currency will allow China to better monitor citizens’ economic activity, and enforce rules accordingly.
Zoom out: This ban is not unexpected. Crypto-related companies and mining operations were already moving out of the country as the Chinese government, over the years, has become less welcoming to them than a restaurant 15 minutes before closing time.—JW