Concern Not, China Is Not Banning Cryptocurrency

In 2008 subsequent the economic disaster, a paper titled “Bitcoin: A Peer-to-Peer Electronic Income System” was revealed, detailing the principles of a payment program. Bitcoin was born. Bitcoin acquired the awareness of the earth for its use of blockchain technologies and as an substitute to fiat currencies and commodities. Dubbed the future best technological know-how right after the world-wide-web, blockchain presented options to challenges we have failed to address, or ignored in excess of the earlier couple a long time. I will not delve into the specialized component of it but in this article are some content articles and movies that I recommend:

How Bitcoin Operates Below the Hood

A gentle introduction to blockchain technology

At any time marvel how Bitcoin (and other cryptocurrencies) in fact operate?

Rapid forward to today, 5th February to be precise, authorities in China have just unveiled a new established of polices to ban cryptocurrency. The Chinese federal government have presently finished so very last year, but quite a few have circumvented by way of overseas exchanges. It has now enlisted the almighty ‘Great Firewall of China’ to block obtain to foreign exchanges in a bid to cease its citizens from carrying out any cryptocurrency transactions.

To know more about the Chinese authorities stance, let’s backtrack a few many years back to 2013 when Bitcoin was attaining acceptance between the Chinese citizens and charges have been soaring. Anxious with the value volatility and speculations, the People’s Lender of China and 5 other authorities ministries posted an formal notice on December 2013 titled “Discover on Avoiding Financial Danger of Bitcoin” (Hyperlink is in Mandarin). Quite a few details have been highlighted:

1. Due to various elements these types of as constrained supply, anonymity and absence of a centralized issuer, Bitcoin is not a formal forex but a digital commodity that can’t be applied in the open up industry.

2. All banking companies and financial companies are not authorized to offer Bitcoin-relevant monetary providers or engage in buying and selling exercise associated to Bitcoin.

3. All organizations and web-sites that provide Bitcoin-associated services are to sign-up with the needed governing administration ministries.

4. Because of to the anonymity and cross-border attributes of Bitcoin, businesses offering Bitcoin-linked products and services should to put into action preventive steps this kind of as KYC to avert money laundering. Any suspicious activity including fraud, gambling and funds laundering should to be described to the authorities.

5. Companies delivering Bitcoin-relevant solutions should to educate the community about Bitcoin and the know-how driving it and not mislead the community with misinformation.

In layman’s term, Bitcoin is categorized as a virtual commodity (e.g in-recreation credits,) that can be acquired or bought in its unique type and not to be exchanged with fiat currency. It simply cannot be described as revenue- a little something that serves as a medium of exchange, a unit of accounting, and a shop of worth.

Despite the discover currently being dated in 2013, it is however pertinent with regards to the Chinese government stance on Bitcoin and as stated, there is no indicator of the banning Bitcoin and cryptocurrency. Rather, regulation and instruction about Bitcoin and blockchain will perform a part in the Chinese crypto-marketplace.

A similar observe was issued on Jan 2017, yet again emphasizing that Bitcoin is a virtual commodity and not a forex. In September 2017, the increase of first coin offerings (ICOs) led to the publishing of a individual observe titled “Detect on Preventing Monetary Risk of Issued Tokens”. Shortly following, ICOs were banned and Chinese exchanges have been investigated and finally shut. (Hindsight is 20/20, they have made the proper choice to ban ICOs and stop senseless gambling). Another blow was dealt to China’s cryptocurrency community in January 2018 when mining operations confronted serious crackdowns, citing abnormal electric power usage.

Even though there is no official clarification on the crackdown of cryptocurrencies, funds controls, illegal things to do and safety of its citizens from monetary chance are some of the principal factors cited by professionals. Certainly, Chinese regulators have implemented stricter controls such as overseas withdrawal cap and regulating foreign immediate financial investment to limit funds outflow and guarantee domestic investments. The anonymity and ease of cross-border transactions have also created cryptocurrency a favorite indicates for funds laundering and fraudulent things to do.

Due to the fact 2011, China has played a important purpose in the meteoric rise and fall of Bitcoin. At its peak, China accounted for over 95% of the world Bitcoin buying and selling quantity and a few quarters of the mining operations. With regulators stepping in to command buying and selling and mining operations, China’s dominance has shrunk substantially in exchange for security.

With international locations like Korea and India next suit in the crackdown, a shadow is now casted more than the foreseeable future of cryptocurrency. (I shall reiterate my place right here: nations are regulating cryptocurrency, not banning it). With no a question, we will see extra nations sign up for in in the coming months to rein in the tumultuous crypto-current market. In truth, some variety of purchase was extensive overdue. Around the past year, cryptocurrencies are experiencing selling price volatility unheard of and ICOs are going on literally every single other day. In 2017, the full market capitalization rose from 18 billion USD in January to an all-time superior of 828 billion USD.

Even so, the Chinese group are in astonishingly very good spirits in spite of crackdowns. On-line and offline communities are flourishing (I personally have attended pretty a handful of functions and visited some of the companies) and blockchain startups are sprouting all about China.

Main blockchain companies this sort of as NEO, QTUM and VeChain are acquiring huge attention in the nation. Startups like Nebulas, Significant Performance Blockchain (HPB) and Bibox are also attaining a good amount of money of traction. Even giants these kinds of as Alibaba and Tencent are also exploring the abilities of blockchain to increase their system. The list goes on and on but you get me it truly is heading to be HUGGEE!

The Chinese authorities have also been embracing blockchain technologies and have stepped up endeavours in new a long time to help the generation of a blockchain ecosystem.

In China’s 13th Five-Year Plan (2016-2020), it termed for the growth of promising systems which include blockchain and artificial intelligence. It also ideas to improve investigate on the software of fintech in regulation, cloud computing and major facts. Even the People’s Lender of China is also screening a prototype blockchain-centered electronic currency even so, with it very likely to be a centralized digital forex slapped with some encryption engineering, its adoption by the Chinese citizens remains to be viewed.

The launch of the Dependable Blockchain Open Lab as well as the China Blockchain Technologies and Industry Development Forum by the Ministry of Market and Facts Engineering are some of the other initiatives by the Chinese authorities to support the improvement of blockchain in China.

A the latest report titled ” China Blockchain Development Report 2018″ (English variation in the connection) by China Blockchain Study Middle in depth the advancement of the blockchain business in China in 2017 like the many steps taken to regulate cryptocurrency in the mainland. In a individual segment, the report highlighted the optimistic outlook of the blockchain business and the significant focus it has been given from VCs and the Chinese govt in 2017.

In summary, the Chinese government have proven a favourable mindset to blockchain technologies regardless of its enforcement on cryptocurrency and mining functions. China wishes to regulate cryptocurrency, and China will get command. The repeated enforcements by the regulators have been meant to shield its citizens from the monetary risk of cryptocurrencies and restrict money outflow. As of now, it is lawful for Chinese citizens to hold cryptocurrencies but they are not permitted to have out any form of transaction that’s why the ban of exchanges. As the market stabilizes in the coming months (or many years), we will see unquestionably see a revival of the Chinese crypto-market place. Blockchain and cryptocurrency arrive hand-in-hand (with the exception of private chain where a token is avoidable). Countries consequently simply cannot ban cryptocurrency without the need of banning blockchain the wonderful technological know-how!

One particular issue we can all agree on is that blockchain is continue to at its infancy. Quite a few fascinating developments awaits us and correct now is unquestionably the ideal time to lay the basis for a blockchain-enabled globe.

Last but not minimum, HODL!