Cryptocurrency Ban In China Is Forcing Blockchain Refugees To Locate In Emerging Markets

China has proven that the centralized government has taken a very hardline stance on cryptocurrencies. The latest issue appeared as the government decided to have a crackdown on the exchanges of the country.

However, it should be noted that China’s actions against cryptos may take its toll: crypto refugees are leaving the country and they are taking the keys to the blockchain with them. Now, these “crypto refugees” are deciding to go to places that support cryptos like Singapore, Tokyo, New York, London and Paris.

As you can basically buy your entrance in many countries with money, being a successful crypto investor enables you easy access to these countries and you only need a laptop to actually be able to trade there too.

During last year, you could buy your citizenship in Vanuatu, in the South Pacific, with $280,000 USD worth in Bitcoin (BTC). Antigua has a similar scheme. You can simply go to these places and be free to trade all you want.

China Gets Tough On Crypto During Crackdown

During the latest crackdown on the market promoted by China, which includes banning access to all foreign exchanges, it is sure that many young people will hit the road. China will use its well-known “Great Firewall” to ban all foreign exchanges.

However, it should be noted that China does not hate the blockchain technology, it simply hates not controlling it. The country is a great enthusiast of this technology and it has invested more than $3 billion USD in blockchain projects recently. The reason why China uses such a strict legislation is because it wants control over the economy.

The side effect of this stance is that, while it does give China more control for whatever the politicians want to do with the technology, it loses some interesting companies. NEO is a great example. It had the technology to be big and it was held back by the Chinese government. Last year’s ban decimated NEO and it became a cautionary tale for ICOs in China.

It is mainly because of this that companies like OKCoin and Binance decided to get away from their home markets and relocate their Asian operations to Japan or Singapore. China went as far as to impose travel bans on important executives, so it is clear that it wants all the blockchain power under its claws.

As Binance has a vast operation, which is, in fact, the largest in the world for crypto exchanges (having a 24 hour trading volume of more than $4 billion USD), it can be a big loss for China. The founder of the company, CZ, became a billionaire in only seven months because of the company.

When Binance left China, it certainly took great blockchain engineers, investment and a vast amount of money in taxes. In a case that is similar, tokens rushed for listings in Hong Kong exchanges last year and traders and entire offices moved. Online wallets were emptied and the money was sent to other countries, so it is clear that China loses a lot by not letting crypto investors have more freedom.

Even if the Chinese government is happy with its decisions and believes that this is the right way, it is important to notice that these losses are huge and that could have been prevented in many ways like just discussing with people.

Blockchain And Cryptocurrencies

Does blockchain need cryptocurrencies? According to some, trading and using the blockchain can be considered two sides of the same coin, at least when you are trying to get mass adoption. There is a growing black market in China for cryptocurrencies as many companies are simply not accepting crypto users anymore.

However, it should be noted that underground payments go the black market, not the mainstream economy, so this is also money that is lost. With a simpler and more open legislation, the Chinese government could have netted billions of dollars, so it remains clear that China is simply not interested in this money.

Other countries are following an even harsher trail than China. Bangladesh, for instance, is basically hunting Bitcoin users. According to reports from the country, people are imprisoned for up to 12 years for money laundering for using Bitcoin. Iran has also made cryptocurrency trading a crime.

The Crypto Refugees

As traders have to live in the shadows or leave the country, most of them are deciding to leave it and start new lives overseas in zones that are more crypto friendly. While many people flee wars or poverty, now some richer people are fleeing tough legislation. These tax exiles are worth some money and they have found a place to call home especially in Tokyo, Hong Kong and Singapore.

In fact, Singapore is emerging as a powerful country for blockchain development. As Bangladesh and China are turning their backs on the traders, many of them are welcomed in Singapore, which is quickly turning into an important crypto hub.

The former British colony only has 5.7 million inhabitants but it is already famous for being very business-friendly and for becoming a financial global center for Chinese and South Korean ICOs banned from their home countries.

Singapore is one of the richest nations in the world per capita and it is the second country by the Index of Economic Freedom, so it has reasons to attract investors to the place.

In Europe, Malta is one of the main attractions for investors and it has become a very important crypto friendly company and anonymous tax havens like the British Island are also attracting investors.

While China makes its traders become bandits or force them to leave the country, it will certainly lose money. It is not easy to figure out how much, but it is certain that being less severe could have benefited China.

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