Earlier, when it came to bitcoin hotpots and cryptocurrency mining hubs, China used to top the table, but things were incredibly different. It seems like China does not hate the concept of cryptocurrencies but is worried about its volatile nature. Visit BitIQ Site to get a deep analysis of bitcoin trading. This country’s regulators and higher authorities suffered a lot while deciding on a robust cryptocurrency regulatory framework.
China’s concerns of cryptocurrency outplacing its fiat currencies were legit as citizens of China were heavily attracted by digital currencies and leaned toward the returns digital currencies were offering. Here is a complete guide to China’s relationship and history with cryptocurrency.
- China was amongst the early movers in terms of cryptocurrency technology. For example, China’s one of the famous search engines started to accept bitcoin payments when no one was even familiar with the concept of bitcoin.
- China was the first to develop a cryptocurrency exchange for the digital currency exchange. One famous international cryptocurrency exchange Binance is correspondingly based in Hong Kong.
- China began to make cryptocurrency transactions in 2013 when people were not even with decentralized cash.
- China continued to halt specific initial coin offerings, digital currencies, and other tokens until government authorities illegalized each cryptocurrency transaction.
China’s relationship with cryptocurrency till 2018!
Bitcoin faced several challenges to get listed on a trading venue; China at first created a cryptocurrency exchange that enabled making and taking orders by digital currency users. When it came to bitcoin’s early movers, China always topped the table. China promoted cryptocurrency trading with the help of its digital currency exchange.
As discussed above, a famous search engine based in China started to accept BTC payments. After that, China began to host gigantic bitcoin mining plants making cryptocurrency mining more centralized. Later, one famous ASIC manufacturer entered the market and dominated the mining hardware industry.
The famous ASIC manufacturer is known as Bitmain. Later this company owned two gigantic mining pools currently leading in terms of hash rate in the bitcoin mining industry. Digital currency mining as an enterprise business sustained growth in the latter year. The more it became popular, the more Chinese showed their interest in this industry. The Chinese government addressed these issues, and initial coin offerings were no longer allowed to operate in China after 2017. In short, the Chinese government announced a ban on initial coin offerings.
China’s relationship with the cryptocurrency after 2018!
China became the preferred region to set up a bitcoin mining plant as the price of electricity in this region is significantly lower. China accounted for the generation of more than 60% accurate guesses on the Bitcoin blockchain. In 2021, China decided to stop every operation regarding cryptocurrency and announced a complete flash crackdown. The crackdown in China resulted in a massive dwindle into the hash rate of the bitcoin mining community overall and ended up giving more rewards to bitcoin miners.
The hash rate on the bitcoin blockchain is still declining as many provinces in China continued bitcoin mining operations even after the ban. Some of the famous cryptocurrency communities of China suspended their operations. The digital currency mining pool announced that it would no longer be offering services in China as per government rules.
Even after the crackdown, people used to perform digital currency operations, and that is why people’s banks announced that every cryptocurrency transaction falls under the category of illegal actions. In short, trading, mining, and investing in a cryptocurrency, initial coin offering is criminalized in China. It is why miners had to move their mining plants to other regions.
The future of cryptocurrencies in China!
The future of digital currencies in this country is entirely indefinite. However, the ban on private cryptocurrencies has created government-approved digital currencies opportunities. For example, Yuan is the central government-powered digital currency globally.
The government of China is heavily impressed with the concept of a Stablecoin and will release the first official stable coin of China very soon. Digital currency backed up by government authorities promotes the concept of cryptocurrency but in a safe manner. That is why the future of other digital currencies in China is highly uncertain.