By Usman Salami
Reporting on the China outright ban on cryptocurrency, as the Central Bank of China come out in clear unequivocal terms to pronounce a ban on digital currencies across the People’s Republic of China, a country in East Asia
Stating that cryptocurrency is unsafe for assets owners to trade on or mine, and also announced that trading or mining crypto assets would be considered a crime henceforth, and the Government would not hesitate to prosecute offenders.
The Central bank of China made this announcement on September 24, 2021, adding that the services of crypto-based firms are suspended as well
It will interest you to know that the Chinese crypto market is one of the largest crypto trading markets in the global world, this is evident in the price crash of Bitcoin by $2000 around the time of the announcement, that’s about 5.5%. This is due to panic sales of crypto-asset owners.
This not being the last Chinese government has placed a ban on crypto, also in 2019, there was an official ban on cryptocurrencies in China, yet the mining and trading activities of Bitcoin still thrived online via foreign exchange.
Although the Chinese Government had always frowned on digital currencies. In May, it reiterated that there is no guarantee of safety for digital currencies as the government was going to throw in its weight to put a stop to digital currency activities.
It stated that its volatile nature puts users at great risk of losing their assets and such digital innovation that thrives on anonymity is bound to be an avenue for money laundering, illegal fundraising, and other crimes.
In June, it issued a strict statement to banks to stop facilitating crypto transactions and banned the mining of cryptocurrency, which is done by using high tech powerful computers and solving complex math problems to produce new coins.
The recent ban on cryptocurrency in China is more distinct and deliberate as 10 Chinese Government agencies are strongly involved, vowing to work day and night and seeing a complete crackdown on all cryptocurrency activities across China
The Chinese Government said cryptocurrencies cannot be circulated because they are not fiat currency and that their activities are altering and distorting normal economic activities.
Notwithstanding the ban on cryptocurrency in China, trading and mining are still on in other countries such as El Salvador who went as far as adopting Bitcoin as the legal tender.
The president, Nayib Bukele said that they are trying to start to design a country for the future. It became a law that banks should facilitate bitcoin transactions and accept it as a legal tender alongside their fiat currency
Stating that it would ease the citizens of the stress and burden of making cash payments or transfers, and also, it would give them access to digital finance AND MANY more advantages he referred to
Cryptocurrency has come to stay and, the sooner governments officials start to adopt it at best and regulate it at worst, the better for them
Because they cannot out rightly ban it, they can only stop its activities in their country. So, China should have sought a diplomatic means to reach a consensus and keep regulating crypto activities
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And ensure that perpetrators of crypto crimes are punished. Although the recent crackdown has sent the price of Bitcoin plummeting the prospects of the cryptocurrency are higher in the future.
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