by Viko

Image Credit — Chat Karen Studio/

The recent market movements diverted the entire market attention towards China. President Xi Jinping recently commented on the future potential he sees on the blockchain technology and it shoots the prices of Bitcoin to a new 3-month high. He then reiterated that cryptocurrencies are unregistered securities that facilitate fraud and Ponzi operations and the markets lost $29 billion within 2 days. Although China is expected to release its own state-backed digital Yuan later next year, it’s relationship with cryptocurrencies has generated bewilderments in the markets. The cryptocurrency ban, potential adoption of blockchain, and development of state-backed cryptocurrency are not giving a fixed direction and decision which the global markets should form about China. In this article, we will analyze the current state of China regarding cryptocurrencies and the events which have occurred in the world’s most populous country.

In January 2017, the central bank warned several digital currency exchanges they would be shut down if they violated anti-money laundering rules. The ban on the entire ICO and exchange activity started on September 5, 2017. As BBC reported in one of its report, the People’s Bank of China (PBOC) declared initial coin offerings (ICOs) illegal and wanted them to “cease immediately”. As part of the ban, Chinese authorities called on individuals and organizations to refund investors for any amount raised through ICOs. PBOC responded with their intentions of placing this ban and said it was purposely implemented to protect investors from excessive risks and keep their investments secure.

In February 2018, China decided to block all websites related to cryptocurrency trading and initial coin offerings (ICOs) — including foreign platforms — in a bid to finally quash the market completely. An article published in China’s daily newspaper quoted the following:

“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” said an article published on Sunday night by Financial News, a publication affiliated to the People’s Bank of China (PBOC).”

“ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions.

“Overseas transactions and regulatory evasion have resumed … risks are still there, fuelled by illegal issuance, and even fraud and pyramid selling,”

In October 2018, a report published by PBOC stated that the government has shut down 88 ICO trading platforms and 85 ICO projects operating in the country or catering to investors based in the country. PBOC again flaunted their ban by saying that:

“The global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market. The impact has been highly recognized by the community.”

The report by PBOC also stated that their new methods of restricting the ICO industry have recently blocked 124 IP addresses, and have closed 3,000 accounts as a result of their increased oversight.

April 2019 — News flashed that Chinese regulators are proposing a ban on cryptocurrency mining as they think the consensus mechanism Proof of Work lead to utter waste of energy. China’s National Development and Reform Commission (NDRC) published a new paper that includes this proposal for this ban. As the South China Morning Post points out, China’s coal-dependent regions like Xinjiang and Inner Mongolia have become popular destinations for crypto-miners looking for cheap electricity. It is not hidden from the world that all major mining pools are installed in the Chinese continent. However, no concrete ban and rule have been implemented by the Chinese legislature and the ban currently still sits in the proposal books.

October 25, 2019 — In the 18th collective study of the Political Bureau of the Central Committee, Xi Jinping emphasized the use of blockchain as an important breakthrough for independent innovation of core technologies and accelerated the development of blockchain technology and industrial innovation. This created an uproar in the global markets and a sudden surge was seen in the prices of Bitcoin and other cryptocurrencies. Following this was a report by Nikkei which mentions China has applied for the most blockchain patents between 2013–2018. The U.S., China, Japan, South Korea, and Germany together received about 100 to 200 blockchain-related patent applications annually in the six years through 2014, according to Tokyo-based research firm Astamuse. Applications have skyrocketed in the last few years, largely thanks to China, with the cumulative tally reaching roughly 12,000 for 2009 through 2018. Chinese players submitted roughly 7,600 applications in that period — about three times as many as Americans (source —

November 17, 2019 — Crypto giants Binance Holdings Ltd. and Tron have been banned on China’s largest microblogging service Weibo in between China’s dubious stance on cryptocurrency. At the same time, watchdogs in Shanghai issued notices calling for a cleanup of companies involved in cryptocurrency trading, while one in Beijing warned against illegal exchange operations.

November 22, 2019 — PBOC stated that “Investors must not treat virtual currencies the same as blockchain technology. The issuance and trading of virtual currency contain multiple risks, including fictitious assets, operation failure, and speculation,”

As of today, the government has already shut down six onshore virtual currency trading platforms, disposed of another 203 platforms linked to overseas servers and closed nearly 10,000 payment accounts, as well as about 300 WeChat marketing accounts, according to China Securities Journal. But keeping aside all the chronology of events and intercontinental shutdowns, it is not a hidden fact that Chinese traders hold a massive trading volume share in exchanges like OKEx, Huobi Global, Binance, Bitmax, BKex, and many more. For trading Yuan, exchanges established outside the Chinese territory have installed P2P services to allow people to convert Yuan to cryptos and back. Bitcoin eventually finds a way and China is the best example that showcases it. Although a clear comment on the future of China’s relationship cannot be made as the regulatory bodies themselves look filled with MIXED FEELINGS. But for now, let’s just say:


by Viko


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