hera ‘s a quick summation of the events that led to China ‘s eventual lockdown on cryptocurrencies and the government ‘s actions to keep up with the emerging ball-shaped digital economy.
Reading: China’s History With Cryptocurrency
- China was one of the first countries whose people quickly embraced cryptocurrency.
- The first cryptocurrency exchange, BTC China, opened in 2011.
- Cryptocurrency was accepted as payment for services as early as 2013.
- China continuously banned specific cryptocurrency actions until all transactions were prohibited.
- The Chinese government is developing a digital currency that will be pegged to its currency, the Renminbi.
China and Cryptocurrency 2009-2018
beginning publicized in 2009, Bitcoin did n’t take off until trade started in 2010. however, once it was realized that Bitcoin had an equivalent decree currency value, it caught on over the adjacent few years as the cryptocurrency gathered care and value. early cryptocurrency investors began to see digital returns, and popularity began to spread .
China was among the earliest countries to enthusiastically embrace cryptocurrencies. In 2011, its beginning cryptocurrency exchange, BTC China, began trading. In addition, Baidu, China ’ s search engine giant, began accepting Bitcoin as requital for web site security system services in 2013. large-scale cryptocurrency mining operations began setting up soon thereafter .
large-scale mining operations were centralized in China because of the relatively bum electricity, attractive to miners due to the boastfully amounts of energy required. By 2014, the emerging industry in China welcomed Bitmain, one of the beginning cryptocurrency mine equipment manufacturers and mining pool operators. At one prison term, it was responsible for most of the Bitcoin mine operations globally and ran the largest mining pool. Bitmain besides became a leading manufacturer of application-specific integrate lap ( ASIC ) mine equipment .
Cryptocurrency mine, as an industry, continued to grow throughout 2016 and 2017. Digital currency grew in popularity as people ‘s interest in anonymity and respect increase increased. The chinese government began addressing growing concerns about cryptocurrencies replacing its decree currentness by banning initial mint offerings ( ICOs ) in 2017.
Cryptocurrency and China 2019-2021
Throughout most of 2020, China held the majority of bitcoin mining with an average monthly hash rate of around 67 %. In May 2021, the State Council announced further crackdowns on bitcoin mine in China. As a resultant role, cryptocurrency mining began to dwindle in October, falling to 55 % of global mine. It continued a steady decline until June 2021, when all mine stopped in China .
In July 2021, Bishijie, an on-line community for chinese cryptocurrency investors, terminated its web site and app in mainland China, and BCTChina, which once ran the country ’ second largest cryptocurrency exchange, announced that it had exited wholly from cryptocurrency-related businesses .
China ‘s ban on initial mint offerings stems from the government ‘s impression that they are generally an illegal method acting of raising public funds for condemnable activities. Following the complete banish on cryptocurrency, the operators of cryptocurrency exchange Huobi Global closed its doors to newly users in mainland China in September 2021. It besides began retiring all existing accounts through December 2021 .
China ‘s Cryptocurrency Future
In November 2021, the U.S. Library of Congress officially recognized an absolute cryptocurrency ban in China in its November cryptocurrency update. however, China ‘s complete ban of cryptocurrency has n’t spelled its end in the country—instead, the banish has opened the door for an official digital currentness backed and recognized by the politics. In its fourteenth 5-year design, the politics discussed fiscal sector reforms, which included developing a digital currency .
Following the cover politics matter to in developing an official stable coin for use, the People ‘s Bank of China issued a knead composition outlining its approach to continued development into e-CNY ( China ‘s digital yuan ) .
While there is no timeline for the release of e-CNY, the government and cardinal bank are attempting to ensure that the state ‘s digital currentness addresses the necessitate for digital cash and the anonymity that it brings. In the ferment paper, the central savings bank states that it considers anonymity necessary for little transactions ; however, it will retain the ability to conduct anti-money wash operations and counter the financing of terrorism through monitoring, coverage, and investigate .