The Chinese government has again imposed a partial ban on cryptocurrencies. They have asked the payment companies and banks to stop providing services related to cryptocurrency. The government has also warned the investors regarding the risk involved with the same. But it is still legal to hold and mine cryptocurrencies in the country. In fact, China is the largest hash rate producer globally and has a large impact on the mining of Bitcoin.
Less of a ban more of a restriction
China has restricted the banks and other financial companies from providing services to crypto exchanges and anyone dealing in the sector. The government has made it very clear that any services from payments to settlements, registration and trading should be disconnected from crypto altogether. According to the government of the country, the rise of the prices of Bitcoin and other currencies have had serious implications. It could result in huge losses for investors and could also contribute to a economic collapse.
At the same time, China has also banned any ICO (Initial Coin offerings) in the country, as well as exchanges from operating in there As an individual one can hold or mine crypto but no company should give any service related to it. But that was the case with China for quite some time now. It is still the largest hash rate producers globally due to the cheap electricity rates. The country’s crackdown on crypto doesn’t mean much as there is always peer to peer trading and one who wants to deal in crypto will find a way.
China’s crackdown on crypto
In 2017, China went against cryptocurrencies for the first time. It shut down the local crypto companies and also stopped markets from operating that resulted in 90% 0f the global BTC trading. Even in 2019, it went all in and blocked ICOs and exchanges. But never did they stop mining or holding of coins. The Chinese government also said that they think virtual currencies are not backed by any real value and are highly volatile and manipulative. These moves against all price cryptocurrencies could also means that the government could come foearsd with its own digital yuan. Personally, I don’t know how well will that play out.
Crypto market is bleeding
The entire market has been in a downtrend after Elon Musk tweet about Tesla not accepting Bitcoin. At present BTC has dropped to $40k and ETH to $3k almost 20-30% below their all-time highs. People are panic selling and the inflow in crypto exchanges are at an 15 month high. But one good thing is the institutions that are still buying the dip and averaging their prices. Let’s see how quick the market recovers and investors enjoy some gains.
What are your thoughts on China putting restriction on banks to provide services to crypto exchanges? And do you think today the market will recover soon? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.
Also Read: MicroStrategy purchases another $10 million worth of Bitcoin
