The Chinese government has been quite hostile when it comes to the world of cryptocurrencies. The government’s stance has been getting increasingly strict about this. The latest order from the Chinese authorities sounds like a death knell for the future of cryptocurrency traders in China as the country has now banned all foreign cryptocurrency trading platforms
In addition to banning cryptocurrency trading platforms, China has also banned all ICOs as well. Back in September, China had issued an order to ban all domestic cryptocurrency exchanges in the country. This led to a widespread panic in the markets and resulted in a crash where Bitcoin’s price fell by 50%. However, trading was still allowed on the foreign cryptocurrency exchanges.
The first signs of this change in policy came when platforms such as Baidu and Weibo stopped showing any promoted content related to cryptocurrency. Baidu didn’t allow cryptocurrency ads in the past too but had relaxed this policy for the past few months. However, it is back in effect now and it looks like China is closing its doors to the cryptocurrency markets.
China’s new stance now tightens the noose around the neck of cryptocurrencies. China’s Internet Finance Association has been trying for weeks to dissuade people from investing into cryptocurrencies, calling overseas trading a major risk. However, that effort went in vain as people continued to invest in cryptocurrencies.
The latest move from the country now blocks all cryptocurrency trading platforms and ICOs in the country - domestic as well as foreign. Due to these strict laws and an unfavourable government, China’s domestic cryptocurrency exchanges are either shutting down or setting up offices in other, lenient nations. The cryptocurrency mining business and cryptocurrency miners too are moving out.
Here’s a report from the Chinese media explaining why this ban has been issued:
“To prevent and mitigate financial risks, authorities will take regulatory measures against ICOs and virtual currency exchanges inside and outside the country, including the banning of relevant businesses, banning and disposing of domestic and foreign exchange virtual currency websites.”
The great firewall of China has now been reinforced to block cryptocurrency websites too.
China has been one of the biggest contributors to the spread of FUD in cryptocurrency markets. FUD, which stands for Fear, Uncertainty and Doubt emerges when governments of major countries announce drastic changes to their policy. Of late, South Korea and India led FUDs were causing a market upset as cryptocurrency prices were on a decline. However, with China now banning cryptocurrencies completely, it is likely to have a major effect on cryptocurrency markets.