Is China Considering Abolishing its Ban on Bitcoin?
Cryptocurrency investment communities are holding their breath as they await confirmation of the news, is it true? There is no denying that crypto-investors are being tantalised with recent reports. Such reports suggest that China may be in the midst of reconsidering its current bitcoin ban and other cryptocurrencies. Such an event could trigger monumental gains in cryptocurrency. It could also set further ablaze a market that’s already been on a serious bull-run.
Bitcoin Banned in September
In a move that smacked of suspicion right from the moment it was announced back in September, Chinese regulators had prohibited all cryptocurrency mining activities. The country cited concerns that speculative trading was “disturbing economic and financial order [and] breeding illegal and criminal activity." This is according to a People’s Bank of China statement. In simpler terms, cryptocurrencies were a financial component of the communist regime’s economy that Beijing discovered was impossible to control with any amount of precision. Ironically, decentralisation is a deliberate concept of Bitcoin and one of its foundational principles.
But the coup de grâce of September didn’t come out of the blue. Beijing had been taking steps to impose legal restrictions on a wide array of cryptocurrency activities dating back to 2013. Despite the Chinese government’s efforts, their crypto industry continued to thrive.
In fact, the Chinese ban has done little in terms of weakening the mainstream adoption of Bitcoin and other digital assets. The move was especially pivotal in catapulting the US to the top of the world’s crypto mining nations. Even GOP lawmakers suddenly saw the benefit of making the U.S. a global cryptocurrency hub after China's recent ban. Since then, the value of bitcoin has doubled in price. Because of this, the Chinese government is likely experiencing second thoughts.
For now, China has willingly forfeited “pole position” in the crypto-race. Perhaps now they see that the most prudent economic course of action is a return to the crypto-verse, even if it means doing so at much higher prices. The speculation is continuing on social media. Reports are conflicting in terms of whether or not the country’s National Development and Reform Commission is really seeking public opinion on the inclusion of crypto mining in its list of “phased-out” industries.
China hasn’t turned its back entirely on digital currencies though. The communist regime has been doing some experimentation with a digital form of currency that converts to their own official currency, the yuan. China conducted some tests on the digital state-backed version of the yuan, in April of 2021. It doesn’t require an internet connection to make transactions and the functionality has been compared to Apple Pay. If successful, the digital currency is expected to evolve as one of the communist nation’s primary payment methods.
Why China really banned cryptocurrencies in the first place is still a subject of debate. Perhaps China sees Bitcoin for what it truly is and became frightened by its power. A resourceful tool against a government that wants total control over its citizens.
Author: Greyson Kelly
Greyson Kelly is a business writer living in Milwaukee, Wisconsin. He writes extensively on technological trends, cryptocurrency, and ‘cutting edge’ industry topics. He has an MBA in Business and has over a decade of experience in communications and public relations.