Readying for a Cryptocurrency World: Tiongkok Edition

Over the past 12 months, the cryptocurrency market procured a compilation of heavy blows from the Chinese authorities. The market got the hits say for example a warrior, although combos have taken the toll of its in most cryptocurrency investors. The market place lackluster performance in 2018 pales in comparison to its great thousand-percent gains in 2017.

What has transpired?

Since 2013, the Chinese government have taken actions to regulate cryptocurrency, however, almost nothing compared to the thing that was enforced in 2017. (Check out this information for an in depth assessment of the official notice released by the Chinese government)

2017 was a banner season for the cryptocurrency market with all the interest and growth it’s achieved. The extreme price volatility pushed the Central bank to adopt more extreme measures, which includes the ban of first coin offerings (icos) and Clampdowns on domestic cryptocurrency exchanges. Soon after, mining production facilities in China were forced to shut down, citing too much electricity consumption. Many exchanges and industrial facilities have moved offshore to avoid regulations but remained available to Chinese investors. Nonetheless, they still don’t escape the claws of the Chinese Dragon.

In the latest series of government-led efforts to keep an eye on as well as ban cryptocurrency trading among Chinese investors, China extended its “Eagle Eye” to monitor foreign cryptocurrency exchanges. Companies as well as bank accounts suspected of carrying out transactions with foreign crypto-exchanges and related activities are subjected to measures from restricting withdrawal limits to freezing of users. There have also been ongoing rumors of all the Chinese community of even more extreme measures to be enforced on international platforms which enable trading among Chinese investors.

“As for whether there will be further regulatory procedures, we will need to hold on for orders from the higher authorities.” Excerpts from an interview with team leader of the China’s Public Information Network Security Supervision agency under the Ministry of Public Security, 28th February


Think about your kid committing his or perhaps her savings to pick up a downloadable product (in this situation, cryptocurrency) that he or maybe she has zero way of validating its value and authenticity. He or perhaps she could get fortunate and strike it rich, or lose everything when the crypto-bubble burst. Now scale that to millions of Chinese citizens and we are talking about enormous amounts of Chinese Yuan.

The current market is heavy with scams and pointless ICOs. (I’m sure you have heard news of individuals driving coins to random addresses with the promise of doubling their investments as well as ICOs that simply don’t make sense). Lots of unsavvy investors are in it for the money and would care a lot less about the science and innovation behind it. Crypto signals of many cryptocurrencies is produced from industry speculation. During the crypto-boom in 2017, get involved in any ICO with possibly a popular advisor onboard, a promising staff or perhaps a great hype and you are guaranteed at least 3X the investments of yours.

A lack of knowledge of the technology and also the firm behind it, combined with the proliferation of ICOs, is a strategy for disaster. Members of the Central bank reports that nearly ninety % of the ICOs are fraudulent or even involves illegal fundraising. In my opinion, the Chinese government wants to guarantee that cryptocurrency remains’ controllable’ and not too huge to stop working within the Chinese community. China is taking the best actions towards a safer, far more regulated cryptocurrency world, albeit aggressive and controversial. In reality, it could be perfect move the country has taken in decades.

Will China issue an ultimatum & pull in cryptocurrency illegal? I highly doubt very since it’s pretty pointless to do so. Now, financial institutions are blacklisted from carrying any crypto assets while people are allowed to but are barred from working on any forms of trading.

A State run Cryptocurrency Exchange?

At the yearly “Two Sessions” (Named because 2 major parties National People’s Congress (NPC) along with the National Committee of the Chinese People’s Political Consultative Conference (CPCC) both take part in the forum)held on the first week of March, executives congregate to go over about the most recent troubles and make essential law amendments.

Wang Pengjie, a fellow member of the NPCC dabbled into the prospects of a state-run digital asset trading platform as well as initiate educational projects on cryptocurrency along with blockchain in China. However, the recommended wedge would call for a authenticated account to allow trading.

“With the establishment of similar polices as well as the co-operation of the People’s Bank of China (PBoC) and also China Securities Regulatory Commission(CSRC), a governed and efficient cryptocurrency exchange platform would perform as a formal way for business enterprises to raise funds (through ICOs) and investors to keep the digital assets of theirs in addition to reach capital appreciation” Excerpts of Wang Pengjie demonstration at the Two Sessions.

The March towards a Blockchain Nation

Central banks and governments worldwide have struggled to grapple with the rising interest in cryptocurrencies; although one thing is sure, all have embraced blockchain.

Despite the cryptocurrency crackdown, blockchain is gaining popularity and adoption in various amounts. The Chinese government happen to be supporting blockchain initiatives and choosing to wear the technology. In truth, the People’s Bank of China (PBoC) have been working on a digital currency and also have performed mock transactions with some of the country’s commercial banks. It’s nonetheless unconfirmed if the electronic currency will be offer and decentralized options that come with cryptocurrency like immutability and anonymity. It wouldn’t come as a surprise in case it seems to be only a digital Chinese Yuan provided that anonymity is the last thing which often China wants in the country of theirs. However, invented as a close replacement of the Chinese Yuan, the digital currency is going to be put through existing monetary policies and laws.

People’s Bank of China Governor, Zhou Xiaochuan. Source: CNBC

“Lots of cryptocurrencies have observed explosive development which can draw significant negative influence on retail investors as well as shoppers. We don’t fancy (cryptocurrency) products that utilize the huge chance for speculation that offers individuals the picture of getting abundant overnight” Excerpts from Zhou Xiaochuan interview on Friday, 9th March.

On a media design on Friday, 9th March, Governor of Some people’s Bank of China, Zhou Xiaochuan criticized cryptocurrency projects that leveraged on the crypto-boom to profit in and fuel industry speculation. He also mentioned that development of the digital currency is’ technologically inevitable’

On a regional level of fitness, many Chinese cities have drive around blockchain initiatives to promote advancement in their region. Hangzhou, renown for becoming the headquarters of Alibaba, have claimed blockchain technology to be among the city’s top goals in 2018. The local government in Chengdu city were also suggested the putting together of an incubation facility to create the adoption of blockchain technological innovation inside the city’s economic services.

Local conglomerates such Tencent and Alibaba also have produced partnership with blockchain firms or set up projects by themselves. Blockchain firms like VeChain also have secured many partnerships with Chinese businesses to boost supply chain transparency in China.

All clues point to the fact that China is working towards a blockchain nation. China has always had a wide open mentality to emergent technologies such as Artificial Intelligence and mobile payment. Henceforth, it is without a doubt that China will be the first blockchain enabled country. Will we see the Chinese government backing down and permit its citizens exchange again? Most likely, once the market has matured and is much less volatile but not really in 2018.

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