China's Central Bank States Crypto Ban Is A Huge Success

China’s Central Bank States Crypto Ban Is A Huge Success

China’s Central Bank celebrates the highly publicised crypto ban as a huge success. This ban put into effect since September 2017,  has reduced the involvement of Chinese currency in the crypto market to less than one percent. This information was published by Xinhua, the state-run press agency.

For a long time, uptil September 2017 Renminbi(China’s National Currency) to bitcoin transactions made over 90 percent of the total trade. Alarmed by this high volume, the central bank, People’s Bank of China (PBoC) banned the use of their fiat currency in cryptocurrency transactions and also put travel bans on OkCoin and Huobi’s executives.

Apart from this, the Bank shut down 85 Initial Coin Offerings(ICOs) and 88 cryptocurrency exchange platforms. The country classified ICOs as an illegal form of fundraising and stated that ICOs “seriously disrupted the economic and financial order”. After this ban was set in place, almost a billion dollars worth of cryptocurrency was returned to the investors, however, a lot of people continued trading in offshore exchanges. This went on till February when the government prohibited the citizens from participating in any form of trading in the cryptocurrency market. OkCoin, Huobi, and Binance also moved their operations away from China. These three and other exchanges moved to Hong Kong, Singapore, United States and Europe to continue operations.

Earlier this year, there were also reports from Hong Kong stating that all advertisements from companies engaged in the cryptocurrency market disappeared from social networks and search engines in China.

Interestingly, despite the cryptocurrency ban, China continues to invest in blockchain technology. For instance, the National Audit Office is planning to improve data infrastructure by using blockchain. The country has also been focusing on introducing a national cryptocurrency that will be issued through the Central Bank.

Officials have shown interest in participating in global regulatory frameworks as presented in the ‘Global Banking Industry Outlook Report’ by the Institute of International Finance.

However, this ban has driven a lot of revenue away from the Country by eliminating 89% of the business in cryptocurrency. This loss doesn’t seem to bother the officials who consider the ban to be a success. Despite this, according to the Xinhua report, China isn’t likely to end this ban.

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Pallavi Janiani

Pallavi Janiani

Content Writer
I am studying Business and psychology at the university of Minnesota. Apart from learning about how the economy and the human mind works, I spend my time dancing with my bollywood fusion team, reading, writing, traveling, usually with a cup of coffee in my hand.