China isn’t shy about expressing its strong disapproval of Blockchain technology and cryptocurrencies. The country implemented many crackdowns on businesses that have anything to do with cryptocurrencies over the past year.
2018 saw the strictest the Chinese government has been since it expressed its disapproval of the revolutionary tech a year ago. In fact, the People’s Bank of China (PBoC) took things to the next level as more authorities were instructed to search for crypto mining hubs with the goal of shutting them down for good.
The government also has its Great Firewall, with aims of disabling everyone in the country from accessing crypto exchange platforms and websites that have Bitcoin and crypto-related content.
Knowing that China is a communist country (though it has some democratic aspects), the government can do anything to its citizens, as long as they see it as being for the common good.
The state-sponsored news publication of China said that illegal crypto-related activities such as regulatory evasion, mining operations, and pyramid selling is rampant in the country. The most widely-used social media platform in China, WeChat, had also seen its crypto exchange accounts closed due to the crackdown of the government on all-things-crypto.
Even the social media account of one of the biggest crypto exchanges in the world, OKEX, has been shut down — proof of how the government was serious in removing any traces of Blockchain influence in the country.
Despite all these, OKEX and Huobi survived and even thrived. These two mega crypto exchanges were reported to be processing more than $1 billion worth of digital coins every day, showing that the crackdown isn’t very effective.
OKEX and Huobi, which were once the biggest cryptocurrency exchanges in China, quickly fled the country and relocated to Hong Kong where they have free reign over cryptocurrencies. Hong Kong isn’t subject to China’s anti-crypto campaign — the reason why it has become a hotbed for Blockchain technology in Asia, and China as well.
Luckily, the relocation proved to be the right decision for these former China-based exchanges as their daily trading volume surged in demand soon after relocating to Hong Kong. In fact, the crackdown, in a sense, made it easier for Chinese traders to tap into the global crypto market.
Some speculated that the Chinese government might have ordered banks and other financial institutions to stop their support of cryptocurrencies, but even if this is the case, this still can’t stop the ultra-influential hype surrounding Blockchain technology.
Chinese cryptocurrencies have experienced an increase in demand, which is very ironic knowing that the government is firmly against them. To make things more surprising, local conglomerates have formed partnerships with multiple Blockchain projects overseas.
NEO, which has been touted as the “Chinese version of Ethereum”, has even experienced a dramatic increase in market valuation. With a market cap of over $5 billion, it is currently the seventh biggest cryptocurrency.