Many economic experts believe that the sudden and complete cryptocurrency ban from China was inevitable. After all, decentralization is all about heightened privacy and transparency that leaves little to no room for the Chinese government to interfere.
In a state-based economic structure like China, it makes sense how decentralized digital currency comes across as a threat. But whether or not the sweeping ban on cryptocurrencies will have an impact on a crypto landscape remains to be seen.
Increase in Bitcoin Prices after the Ban
Ironically, right after the ban, the Bitcoin price increased to new heights. As of now, it looks like big Chinese crypto miners of Ethereum and Bitcoin have no choice but to move their high-powered servers to another country.
Besides, domestic Chinese traders don’t want to lose trade and would want to rebase their crypto mining processes offshore. The cryptocurrency ban in China proves how decentralized digital currency can, in fact, be out of reach of government regulations.
Moving Exchanges Offshore
Pushing crypto-based exchanges offshore was bound to happen. But businesses will need reliable cloud infrastructure and developers to head in the right direction. Crypto miners and businesses understand that whether people can make exchanges from any part of the world. Still, the ban has had a significant impact on Chinese crypto miners who are in the midst of moving exchanges offshore for good.
Chinese Ban is the Most Anti-Crypto and Stringent Action
Historically, Chinese banks have been prohibiting and regulating digital currencies since 2013. People’s Bank of China issued a statement stating that cryptocurrencies are not on par with the standard monetary instruments and will be deemed illegal. The official statement came across as a warning to use cryptocurrency and would invite criminal charges.
After the Ban: Will there be a Resurgence of Crypto in China?
It would be fair to state that the unregulated crypto market startled Chinese state authorities. And targeting crypto became part of a crackdown on people who have successfully played their bets right and now have a lot of riches. Chinese state authorities think the crypto landscape has become an unregulated wild west that requires a thorough review.
Since the ban, Chinese traders and miners have started to move to Singapore. Unlike China, many countries in Asia are open to the idea of adopting a uniform and transparent digital currency that can help people make transactions without having to depend on an intermediary like a bank.
But the discourse centers around decentralized currency exchanges that are far more transparent and secure. And this discourse gets stuck on the fact that decentralized cryptocurrencies involve price volatility. Eventually, you can expect China to roll out its own cryptocurrency via major banks.
In the coming years, Chinese state authorities may change their position on a complete cryptocurrency ban. You can expect a more balanced, tolerant, and state-sanctioned approach towards cryptocurrencies. Throughout Asia, cryptocurrency regulations have complex criteria that fall over the legal lines. Economists affirm that blockchain is at the center that supports decentralized ledger-based transactions. In the hopes to make the eCommerce marketplace more transparent, market experts believe that crypto may continue to gain attraction in China.