The Central Bank of China is calling the country’s crypto ban a huge success as recent data shows that the Chinese Yuan is currently being used in less than 1% of crypto-trades.
Chinese Crypto Ban Huge Success
The Chinese crypto market once dominated the space, accounting for 90% of all global trades according to a report in atimes.com. That was before Bitcoin led cryptocurrency on an unprecedented bull run in the latter part of 2017 which spread fear throughout the banking world and resulted in a tightening of regulations over the space in most countries.
China outlawed initial coin offerings (ICO), a popular fundraising method for crypto companies, in September of 2017 while cracking down on crypto trading, supposedly to combat scams. Since then officials have shuttered 88 cryptocurrency exchange platforms and shut down 85 ICOs.
Zhang Yifeng, a blockchain analyst at the Zhongchao Credit Card Industry Development Company said of the new data:
“The timely moves by regulators have effectively fended off the impact of sharp ups and downs in virtual currency prices and led the global regulatory trend,”
Despite the success of the ICO ban, China is heavily invested in blockchain technology projects. It may lead the world in crypto mining and has been working on a national cryptocurrency that would be issued through the Peoples Bank of China. Officials from the PBoC and regulatory bodies in the government have made pledges to support global regulatory frameworks if they are ever created.
Interested in Global Regulatory Framework
In March the PBoC through its Institute of International Finance released their “Global Banking Industry Outlook Report” in which they outlined a policy of supporting global financial regulation. As quoted from that report “China should actively participate in the global governance of digital currencies”.
While the Chinese government may be calling their crypto regulation a great success it was also the main factor in a massive exodus of crypto exchanges and other related business, along with investors, out of the country.
Binance, one of the worlds largest cryptocurrency exchanges, began in Hong Kong but fearing regulatory interference after China implemented its 2017 ban moved first to Japan and more recently to Malta which has become a safe haven for crypto-based companies.
The loss of revenue created by the ban doesn’t seem to bother financial commentators speaking on the country losing 89% of its crypto trading market. As Guo Dazhi, research director at the Zhongguancun Internet Finance Institute, concurred:
“This indicates that the policy has been very successful. It is within expectations that the yuan’s share in global Bitcoin transactions would drop after China announced the ban.”
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