Cryptocurrency markets

Cryptocurrencies and the PRC: a history of the conflict

Cryptocurrencies and the PRC: a history of the conflict
For the last 3-4 months, news portals dedicated to cryptocurrencies have regularly published materials related to the confrontation between the PRC and miners mining digital assets. Many believe that the Chinese authorities have only recently begun their fight against mining and digital currencies. In fact, it all started back in 2009.
2009: the beginning of the conflict

6 months have passed since Bitcoin was launched. After this time, the first legislative act was promulgated in the PRC concerning the prohibition of digital currencies. Only he had nothing to do with Bitcoin. The authorities fought against QQ Coin. This asset was used for various purposes, including the registration of bonus points in gaming strategies.

QQ Coin has become so popular that the price has become equal to the yuan, it began to be accepted as a means of payment. This led to a wary reaction from the country's People's Bank and the Ministry of Culture and Commerce. A statement was released that first defined a virtual asset. QQ Coin was restricted and allowed to be used only to pay for virtual goods. All games with bets in it were prohibited.
Cryptocurrencies and the PRC: a history of the conflict

Cryptocurrencies and the PRC: a history of the conflict

2013: inclusion of repressive mechanisms

In 2013, Bitcoin has shown explosive growth. In April 2013, the price was $ 220. At the end of the year, the cost rose to $ 1,156. In the same year, 2 companies began to operate in the PRC. This is the Huobi cryptocurrency exchange, the manufacturer of Bitmain mining equipment. The One Foundation was the first in China to start collecting donations in Bitcoins.

In December 2013, the People's Bank of China bans all financial companies from settling with Bitcoin.

The reason for the ban was as follows - Bitcoin does not have a legal and legal status, therefore it is prohibited to use it. This was the beginning of an ever-increasing repressive policy towards cryptocurrencies.
2017: toughening of actions of the authorities

In 2017, Bitcoin shows another jump in price, in December its value was almost $ 20,000. Against this background, the authorities have taken a number of measures. First, a ban was issued on initial coin offerings.

The reason for the ban was that, under the guise of ICO, the organizers were collecting funds bypassing the law. This is the opinion of the People's Bank of China. On September 19 of the same year, trading floors in Beijing and Shanghai were ordered to cease operations.

The BTCC platform also stopped working. As representatives of the People's Bank pointed out, cryptocurrencies are used in order to launder money, pay for drugs and weapons.
2019: danger for miners

In 2019, after the fall, Bitcoin showed growth again after falling at the end of 2018. While traders were monitoring cryptocurrency rate fluctuations, a list of industries against which bans were planned was prepared in the offices of the State Development Committee. They also touched on mining.

However, in the final version of the document, nothing was said about mining. In addition, it seems that the head of the PRC, Xi Jinping, was not against the development of the blockchain, so the miners had nothing to worry about yet.
2021: a sharp increase in bans, an exodus of miners

In 2020, in the PRC, all attention was focused on combating the coronavirus pandemic. The authorities did not pay attention to the miners, trying to minimize the negative impact of the pandemic. However, there has been a significant change in the cryptocurrency market.

In April 2021, Bitcoin price was $ 63,500. There has never been such an indicator. Against this background, the PRC authorities developed their own digital currency, conducted experiments with implementation.

Perhaps the miners calmed down and felt that now they will not be taken repressive measures. However, they were wrong. On May 18, 2021, it was announced that all financial organizations, payment systems should refuse to provide services with digital currencies.

Also on May 21, Vice Premier of the State Council Liu He announced that they would tighten policies in relation to mining and trading. Because of this, the companies involved in mining BTC.TOP and HashCow indicated that they would stop working.

In June, the authorities of a number of provinces began to prohibit miners from mining cryptocurrencies. Power plants began to issue notifications that they cut off the supply of electricity to miners.

Because of this, the hash rate began to fall. Miners began to leave the country, to the USA, Kazakhstan and other states.

In July, the People's Bank of China began to criticize cryptocurrencies further, including stablecoins. According to the bank's deputy Fan Yifei, they are a threat to the financial system, instruments of speculation. After such statements, the difficulty of Bitcoin mining began to fall again.

As a result, we can state the fact that the PRC authorities persistently and consistently pursue a policy of subordinating cryptocurrencies to legislation, banning digital assets and mining that do not fit into the general economic concept of the state.

1000 Characters left

Author’s Posts


Forex software store

Download Our Mobile App

FX24 google news
© 2024 FX24: Your trusted guide to the world of forex.
Design & Developed by FX24.NEWS   sitemap