Will China Be Successful at Crushing Cryptocurrencies?
In 2017, a major underlying theme in the cryptocurrency marketplace was “China Bans Cryptocurrency”. While the 2018 narrative as shifted to “SEC Denies Another Bitcoin ETF“, let’s take a look at if the country and global powerhouse known as China would have the power to dismantle Bitcoin and the cryptocurrency market at large.
The Chinese government has taken a slew of actions against cryptocurrencies and the latest one is banning ICOs and their promotional events. The country’s issue with cryptocurrencies is not due to the underlying blockchain technology, but with the currency itself.
China has taken the position that ICOs are dangerous and that they should be prevented from functioning. As a result, it blanket-banned the ICO market. ICOs were soon squeezed out and ultimately, the government put a final “nail in the coffin” so to say by blocking access to overseas-based exchanges.
On a more local level, province’s economic zones have banned cryptocurrency events as well. For example, the Guangzhou province has banned promotional cryptocurrency events in its attempt to crackdown on digital money.
The question that arises is whether China’s efforts are effective and for the most part, it seems so. The country once was one of the largest cryptocurrency venues in the world, but after government intervention, the local current, the Yuan, has regained its dominance over Bitcoin. Even with the crushing impact on cryptocurrency, there are still discussions concerning blockchain technology, the underlying technology of bitcoin.
When it comes to blockchain though, it seems that China is content with heavily regulating it, rather than banning the technology altogether. The technology is being used as a tool by the government to control, which is a quite different type of use than most countries have implemented.
In short, no single entity or country will ever have the ability to control the entire network unless globally orchestrated, which speaks to the beauty and digital currency nut cracked that Bitcoin is today.