The reasons for China’s anti-Bitcoin crackdown
Nine other organisations, including China’s public safety bureau, banded together last month to prohibit all cryptocurrency transactions in China. According to reports, Chinese-speaking users of several virtual currency exchanges have been cut off. Chinese authorities began a campaign earlier this year to shut down laptop farms in the United States that use a lot of electricity to mine bitcoins.
For a country that accounted for 90% of the bitcoin market five years ago, this is a dramatic shift in sentiment. According to Chainalysis, only the United States received more than $150 billion in cryptocurrency in the first half of the year. This spring, Chinese mining farms produced nearly half of all Bitcoins available worldwide.
To control virtual currencies, there is no central authority because they are run on decentralised computer systems. China’s authoritarian government is currently cracking down on virtual currencies, so this is in direct opposition to this.
China’s capital controls limit transfers to $50,000 per year, and Beijing sees bitcoin as a way around this limitation. On a personal level, it is possible to avoid government interference in financial transactions and investments. Once upon a time, Beijingers could pay for their morning joe with bitcoin.
Other countries quickly set up virtual currency trading hubs, despite Beijing’s initial ban on cryptocurrency exchanges in 2017. However, a few extra steps were required for Chinese users to buy and sell bitcoins. Websites and apps catering to Chinese language users have taken the initiative to block the new rules themselves.
As a precautionary measure, some offshore exchanges have stopped serving Chinese customers. In a number of popular virtual wallets, mainland users can no longer access their cryptocurrency funds.
Consumers in China have to rely on censored media in order to get their hands on digital coins. ChainNode notifies its users whenever there is a “improvement,” as is standard procedure for all major websites. Several posts about Bitcoin and a list of Beijing institutions that accept the currency have been removed from the site.
Regardless of the circumstances, it appears that the deleted content was buried within the occurrences of the problem. The most popular coffee shop in Beijing’s tech district, which was known for accepting bitcoin, has since closed its doors. As long as it’s still available, said a barista, customers can have fun with it for a long time. There was no way he would have come right here to talk about it, he responds. “The authorities will not allow us to do so” when it comes to using bitcoin.
In China, there is no guarantee that Bitcoin will be used as long as customers are able to transfer bitcoins to each other, demonstrating their trust in the distributed network of computers that store the currency. All thoughts which do not fit the Beijing narrative have effectively been marginalised in Beijing’s eyes
New digital renminbi, China’s new digital currency, has received a lot of positive feedback from online commentators on Douyin.com.
To a Chinese man, he says that the United States is not interested in bitcoin. There is “virtual currency,” he said.