Is this ban the death-knell on crypto’s long awaited grave?

Chinese regulators have termed all Bitcoin transactions as illegal. Such announcements have become routine but the market just doesn’t stop being susceptible to the tantrums of the Chinese State. Being the second largest economy in the world sure helps. The market sees red but optimism persists, due to increased corporate adoption.

Every decision of the Chinese Government against the fluid flow of cryptocurrencies has been approached with much skepticism. The blame is to be shared by China’s illiberal state, to market manipulation and of course, the possible rollout of the PBOC’s(People’s Bank of China) own digital currency.

No entity or individual in China can be involved in any transaction involving cryptocurrencies. Ron Insana argues that China will the first of many to do so. Large nations with strong currencies may do so. However, smaller nations with nothing to lose and hostile relations with ‘powerful’ nations may well opt to facilitate crypto, such as El Salvador.

China has always approached innovations beyond its borders with much skepticism. Crypto is another. China has systematically attacked Bitcoin, the most popular cryptocurrency.

The 2013 and 2017 bans in China were imposed on financial institutions and local exchanges, respectively. There was speculation on a possible ban on mining in 2019, but it took two years for it to come into play. Quickly followed by the current ban on transactions.

The crux of the argument from the Government is that they wish to prevent ‘individual risk from being passed on to society’.

China’s ban on mining and transactions are set to prevent it from being a part of the DeFi(Decentralised Finance) revolution. Missing out on the Industrial Revolution couldn’t be helped. A self-imposed exclusion from the future of finance would be tragic for a country that has set its eyes on being the world’s leader.

Crypto, like water, will seep through to welcoming plains. It may lose battles, but will surely win the war.

A blog focussed on cryptocurrency regulation across the world by Yash Palzang Gurung.