On Friday, China took a big step towards blocking the unofficial digital currency in its market. China issued a national wide ban on cryptocurrency mining.
The statement signed on September, 15 by several government agencies, reinforcing the ban on Cryptocurrencies. The people’s Bank of China and other regulators said all crypto-relevant transactions were illegal and to banned.
China said the ban applies to all digital tokens including Bitcoin, Ethereum, and smaller coins. Those involve in overseas virtual currency exchanges are also consider involve in illegal financial activity.
How awful was the decision for the cryptocurrency?
Bitcoin, the largest cryptocurrency, dropped about 5%, to around $41, 100, however, recovered later that day.
Chinese banks have had a history of banning cryptocurrencies like Bitcoin since 2013. Though, the central bank of China is involved in the development of its original digital currency. The electronic version of the country’s yuan will be tracked and controlled by Beijing.
In May, China’s regulators had issued a notice to the payment firms and financial institutions, to not offer any services involving digital currency. This also reflects that the government was concerned about Cryptocurrency mining, and the risk to its financial institutions.
How this decision impacts the future of Cryptocurrency?
The crackdown by the world’s largest consumer market and economy. This lead to concerns and raised a lot of questions about the future of Cryptocurrency. A very limited number of governments around the world support Crypto.
A senior analyst at stock trading platform free trade, Danie Lane said,
‘’China’s latest move could disrupt the evolution of Crypto and not necessarily in the way it wants to.’’
He also added,
‘’ Sweeping and heavy-handed reforms might scare off crypto users in the short but it might just prompt the industry to go back underground.”
” A bit like the music industry found when illegal torrrenting destroyed CD sales eventually it’s more beneficial to innovate alongside user habits rather than fight them.’’
However, Lane proposed that it’s likely a short-term setback to the Cryptocurrency market. ‘’ to think a ban will stop all activity is optimistic at best and quite naïve at worst,’ he said. ‘’ Ironically, taking a whole country out of an open discussion on crypt’s evolution from here just means diehard corners of the market will recede into more nefarious practices rather than move further towards regulations.’’
The analysts and experts say that China’s actions haven’t held back the crypto rise since previously it has put restrictions on the cryptocurrency. Only El Salvador is the country to accept bitcoin as legal tender.
