China’s relationship with “Bitcoin” has been rocky, to say the least, with many reports that the world’s second-largest economy is considering banning Bitcoin exchanges & “ICO’s” from operating on its soil…
Although the rumors have yet to translate into actual policy (except the banning of Bitcoin exchanges in Mainland China in September 2017), it’s not stopped the “market” reacting violently to the news (China is one of the most prolific “Bitcoin” countries, along with Japan).
To this end, it’s important to keep abreast of any of the potential fallout from new updates from the mainland, with developments being continuous. Since the “crypto” space moves extremely quickly, it’s vital to keep on top of any developments when they are either announced or actually implemented in order to stand the chance of making a profit with it.
The current news from China is that its ban on local exchanges is still in place, with many exchange-operators actually going overseas to continue their operations in the likes of Hong Kong or even Singapore etc.
In order to understand *why* the Chinese have banned Bitcoin exchanges, you have to appreciate the political climate in China. China is still communist and has a central “ruling” party that decides much of the economic policy within the country.
Everything from their HUGE SOE’s (State Owned Enterprises) to their 5-year plans have to be ordained by the party in order for them to stand any chance. This is why corruption is rife.
It is also why the “Internet” is monitored (via China’s “Great Firewall”), and why it’s illegal for Chinese mainland citizens to send large amounts of money out of the country (without going through a lengthy bureaucratic process).
For this reason, it’s important to consider the “macro” position of Bitcoin / “crypto” systems within China. This will shed light on whether the country would be willing to open the exchanges again…
China Doesn’t Like The West…
Not strictly true, but is somewhat.
China is a strange one. On one hand, it relishes the liberalism and free market economy brought by Britain and the US, but on the other, it scorns it.
The biggest fear the Chinese have is the “poisoning” of their culture from over-indulgence and decadence. Whilst this has been often misconstrued as the communist party trying to retain a stranglehold on power, it’s actually due to the way the culture has grown.
You’ll see China basically trying to maintain the stoic independence of its people through heavy monitoring of their media, and regulation of their businesses.
As mentioned, it’s very difficult to take money out of the country – and is frowned upon that you would even consider it (although most of them do it anyway).
And so, when it comes to Bitcoin – where you’re able to send/receive money from anywhere around the world, the Chinese government have decided that it’s too volatile a system to permit their citizenry full access.
This goes hand-in-hand with their “great firewall”, and even to the level that you’d actually have your Internet activity monitored if it was thought you were up to no good.
The obvious retort to all of this is that “if you have nothing to hide, there’s nothing to worry about” – but in terms of how that would translate into the anonymous “crypto” systems that have sprung up, the government feels that it cannot trust people to keep their money in the country if they leave it unregulated.
Therefore, it’s vital to remember that “Bitcoin” has not been banned in China, only its exchanges. And unfortunately – since you require the exchanges to actually acquire any BTC – this means that “buying” the tokens are out of the question unless you use an overseas service such as CoinBase. The problem with these is they will deposit to a Chinese bank account, so you’ll likely have to open an account in the US, which has all sorts of problems.
Rumours About Lifting The Ban
Due to the increased interest in Bitcoin, speculation has been rife about the potential rising of the ban…
Whilst there has yet to be any official word from Beijing, many are speculating that the country may end up permitting a “regulated” form of the “crypto” system, and its accompanying exchanges.
If this is true, it could spur the price of the asset back up to where it was at the beginning of the year. As predicted by many, the “price” of each “Bitcoin” (and most others) shrunk after the historic December rally, leaving BTC hovering at around $11,000.
This was originally published at Coinscion.