Once upon a time, the Bitcoin Renminbi (BTC/RMB) was very popular. Unfortunately for the Chinese, that is no longer the case. Recent news stated that the BTC/RMB trading volume, which was once more than 90 percent of the global trades for the token, it is comprised of only 1 percent of all the Bitcoin trades today.
Why has this happened? The Chinese government decided that it did not like cryptos at some point. In fact, the state-run press agency of China, Xinhua, has reported that the country had ordered a ban on Initial Coin Offerings (ICOs) last year and soon after that, it also started to ban trades with the national fiat currency.
The main reason why the government decided to go after cryptos is because they believe that Bitcoin and other tokens are a financial risk over the market and a centralized government like China’s is naturally against the decentralization that is promoted by cryptos.
Bitcoin Price On An All-Year Low
Also, it is no secret that the Bitcoin price has been a perfect analog with a roller coaster lately. After a regulatory crackdown and some recent hacks, the prices have been down for months, reaching an all-year low of $5,800 during June.
The all-time high of almost $20,000 last year is not so far away but it certainly looks like it is. According to a research made by a team of Citi Bank analysts, the price of Bitcoin could go as down as $5,600 soon and CoinDesk priced Bitcoin at around $6,350 for July. All this volatility was stated to be one of the main reasons why Bitcoin was banished from China.
Cybercrimes Plague China And Also Are Linked To Cryptos
Another reason why the ban happened is because cybercrimes are not uncommon in China and the anonymity of cryptocurrencies make them even easier. Just this week, for instance, Chinese authorities arrested 20 people for a cryptojacking scheme. They used a plug-in that infected computers.
The attackers may have earned 15 million Chinese yuan, about $2.26 million USD with their crimes, which is an example of how easy it is to use Bitcoin and other cryptos to steal.
Authorities have also targeted miners for stealing electric energy. As mining is a very energy intensive process, miners sometimes try to steal energy for power grids to complement their own without having to pay for it. Six people were arrested in one case and two more in another one recently by the Chinese police.
Blockchain In China
Sure, China does not like Bitcoin. That is clear enough. However, what about the blockchain technology? Its the digital ledger technology, also known as blockchain, that underpins the whole technology that make cryptos work.
Many companies are recently starting to use for security, logistics or other areas of their companies, so will China follow the trend? Many countries are recently doing it, like Malta and even South Korea, which was pretty anti-blockchain recently, but it decided to regulate the industry to help it grow.
We cannot tell for sure whether the Chinese government will ever accept blockchain as well as Malta, for instance, but the China Banking and Insurance Regulatory Commission (CBIRC) has recently stated that blockchain should not be mythologized.
Why? Because, according to its spokesperson, Fan Wenzhong, the earliest human transactions were made without central authorities, so blockchain is not really a revolution in the world.