China’s central bank has hailed it’s cryptocurrency crackdown a complete success.
Declared by the People’s Bank of China (PBoC) and reported by state media, data apparently shows that the Chinese currency is now involved in less than 1% of all Bitcoin trades worldwide.
The Big A: How did this happen?
The Big A: In September 2017, RMB/BTC trades made up over 90% of the world’s trade in the digital currency. Unnerved by the high volume, the government immediately outlawed paper (fiat) currency from being used in cryptocurrency purchases and even imposed travel bans on Huobi and OKCoin executives, 2 of the nation’s largest exchanges.
It was not just the major players facing government throwback.
The 88 exchanges and 85 ICOs (initial coin offerings) accounting for virtually the entire cryptocurrency services sector in China have all ceased operations since.
Huobi was forced to move its operations to the more crypto-friendly Singapore, while OKCoin, rebranded as OKEx, was embraced by the blockchain-positive jurisdiction: Malta.
Binance too decamped to the Mediterranean Island nation after receiving formal notices to cease operations in both China and Japan.
China also deemed ICOs to be an “illegal public finance” mechanism suited to money laundering and the illegal issuance of securities.
Shortly after, supposedly nearly $1-B, representing 90% of all investments, was returned to Chinese investors who had contributed to the 43 local ICOs conducted in the prior year, remember?
Many were simply transferring their Bitcoin to the now offshore exchanges and carried on trading, until February, when the government banned its citizens from any activity related to the trade and exchange of cryptocurrencies, blacklisting dozens of exchanges in a bid to curb access.
Although cryptocurrency activity is monitored in Hong Kong, the more adventurous Mainland investors have been seeking overseas desks, smuggling Bitcoin back home to sell locally through private chat groups.
The crackdown has had marked success in driving away big-time players in cryptocurrency mining. In January, it was reported that Bitmain moved its regional headquarters to Singapore, and had active mining facilities in both Canada and the US.
Now, in Y 2018, all of the world’s major players in crypto-mining are no longer in China, all forced to seek new homes across Europe and the Americas.
Cryptocurrency activity in China is somewhat puzzling, considering how quickly central agencies have adopted the blockchain.
The governments own National Audit Office is preparing to improve its data infrastructure by blockchainifying it, and a national standardization committee is being formed by their Ministry of Industry and Information Technology.
Jihan Wu, Bitmain’s co-founder and co-CEO, remains tight-lipped about his experiences with hard-line Chinese regulators. In an interview last month, he refused to give comment on the regulatory policies of the Chinese, noting “it’s too sensitive.”
Smart move, yes?
Bitmain is now valued at an estimated $9-B, so there is cause to tread lightly in today’s treacherous regulatory environment.
Currently, Bitcoin is trading at 6,369.9248, -229.19, or -3.47%, as of 3:58a BST, the market is open