Watchdogs: Solving Problems In Chinese — What Happened To Crypto?

Watchdogs: Solving Problems In Chinese — What Happened To Crypto?

By CoinJoy | CoinJoy Magazine | 23 Jul 2021


Attempts to legalize crypto have been made since 2016. European countries are favorable to innovations, testing various ways and methods of their implementation in the real economy.

New technology companies are developing rapidly in countries such as Sweden, Japan, and the United States. Moreover, the EU countries are carefully approaching the regulation of blockchain technologies, taking a wait-and-see attitude. There are also countries such as Thailand, where any turnover of cryptocurrencies has been banned. With the spread of blockchain technologies, the development of the sphere of smart contracts, new opportunities for regulating crypto appear.

China occupies a separate place in the list of countries that work closely with companies related to cryptocurrencies. The exchange rate on cryptocurrency exchanges depends on each decision of the authorities of this country regarding blockchain and cryptocurrencies.

China and Crypto: Abusive or Strong Relations?

China has been talking about its cryptocurrency since 2014 (the Digital Currency Electronic Payment project). The system includes two types of digital currency.

China has strict legislation regarding cryptocurrencies and crypto businesses. Blockchain is supported in the country as China strives to become the most developed country in the world. But the turnover of cryptocurrencies in the country is being monitored extremely closely.

2013: Crypto = Danger

China's regulatory authorities have banned banks from making transactions with cryptocurrency. The People's Bank of China has issued a circular on closing accounts and banning the activities of crypto exchanges. Bitcoin is defined not as a currency, but as a virtual commodity. The Chinese government considered ICO projects risky since they could have a connection with illegal activities and the withdrawal of large cash flows from the country.

2017: Virtual Property

A law has come into force in China that establishes the legal regulation of cryptocurrency in the country. The act becomes the first legal document that describes the principle of regulating cryptocurrencies in China. According to the Chinese law "General Principles of Civil Law of the People's Republic of China", cryptocurrencies are considered as "virtual property".

2020: We Will Support The Domestic Manufacturer

An application for using the national cryptocurrency has been launched in test mode. China was going to launch its national platform called BSN, but these works have been suspended due to the pandemic. The idea is not abandoned, although the exact dates are not called. For China, the national cryptocurrency means to control, as well as reducing dependence on the dollar. In early July, the "Plan for the development of blockchain innovations in Beijing for 2020-2022" was presented.

In 2020, an active movement towards the crypto-yuan continues — the pandemic and the related changes in the economy have strengthened plans to create a national cryptocurrency. China Construction Bank (CCB) opened the registration of wallets for digital yuan. It supports replenishment of the bank card balance, payment by QR code, and transfers. No major deals are being concluded yet. In May, testing of the central bank's national digital payment system began - with the payment of transport subsidies to officials.

Present Time: Chinese Financial Regulator

China Central Television released a video in which it reported that crypto assets have grown by 70% since the beginning of the year. The article "Cryptocurrencies are the number one asset of this year" was published. The Chinese media are controlled by the authorities and are used to promote politically pleasing ideas, so the audience is wary.

Cryptocurrencies in China fall under the classification of "Virtual Goods". The activities of cryptocurrency exchanges and companies are strictly regulated. Relations with ICO in the country are strictly prohibited, and companies that are caught in connection with ICO projects are deprived of licenses and may become defendants in criminal cases. Against the background of news about the ban on cryptocurrency business in China, the bitcoin exchange rate fell. Is this a victory? We will find out this a little later.

 

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The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research. 

 

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