China’s PBoC Intensifies Pressure on Cryptocurrency Activity
- Chinese authorities have intensified pressure on domestic cryptocurrency activity.
Beijing supports the development of the underlying blockchain technology, but it is still trying to limit speculation in digital currencies roughly 1 year since banning their sales in ICOs.
Bitcoin prices surged last year as investors bet blockchain could transform the world as much as the Internet did.
Bitcoin, the world’s most popular cryptocurrency, is currently trading at 7,383.76, down from its December 2017 peak of 18,690.
Daily Bitcoin mining revenue was 77% lower than in December, according to Blockchain.info, a data analytics and wallet provider.
While ICOs and venture capital investment both slowed in July, funding for blockchain companies has topped $16-B YTD, a record and more than 2X the amount raised in all of Y 2017, according to the data.
China once dominated Bitcoin trading, and still accounts for a majority of bitcoin creation through “mining”. But increased regulatory scrutiny, especially as Bitcoin’s price climbed, culminated in the People’s Bank of China’s and other financial authorities prohibiting sales of new cryptocurrencies through ICOs early last September.
Beijing effectively banned domestic BTC/CYN trading too.
On 24 August 5 government bodies: the People’s Bank of China, the Banking Regulatory Commission, the Central Cyberspace Affairs Commission, the Ministry of Public Security and the State Administration for Market Regulation issued a warning about risks from illegal fundraising under the guise of blockchain and cryptocurrencies.
The announcement also targeted those who used overseas servers while luring Chinese investors.
The Chinese government wants to and will maintain financial stability, and will regulate activity such as soliciting money from ordinary people for investment. And we here at HeffX-LTN do not expect Chinese regulators to ease restrictions around cryptocurrency investing even though the government has embraced blockchain technology.
In a speech in May, Chinese President Xi Jinping called blockchain a “breakthrough” technology. The Communist Party also published in August a book whose title translates roughly as “Blockchain — a reader for cadre leaders.”
Meanwhile, three of the world’s largest Bitcoin mining equipment makers plan to raise billions of dollars with initial public offerings in Hong Kong, even as other companies report plunging demand for the chips needed to make Bitcoin.
The fall in the price of Bitcoin from its December 2017 highs has not been matched by an equivalent fall in the numbers of people mining it.”
In the US
The Securities and Exchange Commission rejected another round of attempts to list exchange-traded funds backed by Bitcoin, blocking ETFs from ProShares, GraniteShares and Direxion on concern prices could be vulnerable to manipulation
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