• China shut down digital currency trade in September
• The ban caused much harm than good to China
• Countries like Japan and South Korea took advantage over this
• Chinese government resume cryptocurrency trading by licensing Bitcoin exchange
Bitcoin has always been into controversies ever since its launch in 2009. From it been a victim of appraisal, hacker’s attack, flash crash to been wounded by China’s ban. Last month, the Chinese government, The People’s Bank of China (PBoC) and local regulators imposed a nationwide ban on the digital currency. under regulatory pressure. But for a few cryptocurrencyplayers out there, China have found a new way to get back into the game.
China will likely to resume cryptocurrency trading by licensing Bitcoin exchange. China will likely to resume cryptocurrency trading by licensing Bitcoin exchange. China’s sudden announcement on forcefully shut down of some of the major cryptocurrency exchange created a turmoil over digital currency trading. With this step Bitcoin’s surprising success in China appeared to its end. The whole episode caused the price of Bitcoin moved back to $3,841, following heavy loses sparked by news that Chinese exchange BTCC and rivals will cease trading at the end of September. BTCC is one among the largest exchanges in China.
Bitcoin had been in trouble in China since February, when the Central Bank aiming to rule capital flow, commanded exchanges to halt digital currency withdrawals until they could identify its customers. The outcome of the whole situation resulted in decline of China’s share of global Bitcoin- trade from more than 90% to just about 10%.
This was the time when the trading focus dragged towards other cousin cryptocurrencies and crypto- tokens. These are issued in Initial Coin Offerings (ICOs) which allow startups to raise money. But on September 4th Chinese regulators banned ICOs accusing them a form of illegal fundraising. China then announced an even harsher step to shut down all virtual currency exchanges by end of the month.
WHY CHINA FORCED TO PUT A BAN?
The whole episode started when China’s biggest, government- owned bank announced a ‘comprehensive ban’ on any exchanges that allow buying and selling of cryptocurrencies in China. Some big names, like BTC China or ViaBTC were asked to windup their set- up by end of September 2017. From number of children allowed to born to dominating internet accessibility, Chinese government is prone to excessive control and interference over its citizens. Not surprisingly, they even have habit of peeking into every aspect of its civilian’s rights and life. With these many curtailments of civilian life a ban on a decentralized and anonymous Bitcoin comes with no shock. It is been realized that because of decentralized nature of digital currency, China is afraid to potentially weaken official grip of its money supply.
China is seen as a lucrative destination for private investors. Recent trends calculated that this investment is heavily indulged into cryptocurrencies than Yuan. Which of course caused a concern within Chinese powers.
CONSEQUENCES BAN SUFFERED
The foremost effect was seen on bitcoin losing its value when just a few days before the ban its value reached skyrocketing to over $4000. In doom of doubt many investors sold their assets, shaking the structural market.
Within a few days the news floated all over, cryptocurrency market of China dropped down by 20% in value. With this ban while some countries be wondering to follow China’s path of banning digital currency, other than the one developed by their own, other countries planned to cunningly take an advantage of what China lost.
WHY BAN WAS NOT BENEFICIAL?
Since the ban was imposed, global cryptocurrency exchange market has came to halt as the majority of trading volume from China moved to neighboring markets such as Japan and South Korea. In the wave of this ban, Japanese government officially authorized 11 cryptocurrency exchanges the very same month providing an efficient ecosystem for Chinese traders.
The ban however, did not stop Chinese investors from purchasing and still very much playing the crypto game.
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