Cryptocurrencies are becoming more widely accepted in most of the world as time passes. Conversely, the opposite seems to be the aim in China. Instead, the country is aiming to entirely extinguish cryptocurrency.
Crackdown on Cryptocurrency
The Chinese government recently blocked websites that deal with cryptocurrency transactions. Even initial coin offerings (ICOs) are blacklisted, whether it’s local or foreign. According to Financial News, an affiliate publication of the People’s Bank of China, the reason behind this is to prevent financial risk.
This makes some sense, especially since cryptocurrencies are unregulated and can be very volatile. Take note that Bitcoin reached its peak value of almost $20,000 in late 2017. That sure is a long ride from its initial $0.003 value in 2010.
Knowing how strict China is in protecting their economy, it’s no surprise that they blacklisted a currency that isn’t controlled by any government or any financial institution. But despite this, some of their steps in stamping out virtual currencies have proved to be fruitless.
People Find Ways
Chinese investors have turned to foreign platforms to deal with cryptocurrency transactions. This proves that no matter how strict the policies are, people will still find a way to get around the issues at hand.
This is especially true now that countries are so closely knit to one another thanks to the internet. The Chinese government knows this well, that’s why it also decided to ban cryptocurrency ads from appearing on Baidu, China’s equivalent of Google, and on Weibo, their largest social media network. In fact, the People’s Bank of China also prohibited financial institutions from funding any cryptocurrency-related activity.
This will possibly create a negative impact on the cryptocurrency market, especially Bitcoin, which has already suffered significant drops in value. A single problem, no matter how small, can turn the tides against the crypto world.
Technology at Works
So how do these ingenious people find a way to get around the government’s anti-crypto policy? They do it through VPNs. The article published by Financial News says that people use VPNs to make cryptocurrency transactions, despite the government choking known VPN providers to slow speeds and possible government crackdowns.
There are also many Chinese Bitcoin traders relocating to other countries like Japan and Singapore, creating a stronghold for cryptocurrency trading. It’s through these people that virtual currencies are still alive in China, thanks to their families and friends who are supporting their cause.
The ban initially started in September last year, but even the government’s strict implementations aren’t enough to suppress mainland investors from sponsoring the relocated traders’ virtual transactions.
With this being said, one can see how cryptocurrencies are such a big deal, that even a superpower like China sees it as a threat to its financial safety. We now have a force that can dramatically change the global economic landscape. No matter how governments suppress the growth of cryptocurrencies, it will still find a way to seep into the nooks and crannies of this money-driven world.