During the last couple of months, China has been actively cracking down on digital currency use in the country. While the reasons behind this remain unknown, this is bound to hurt the market, considering the fact that China has been and continues to be the country with the highest digital currency trading volume, especially in the case of bitcoin.
After banning initial coin offerings, which were used by start-ups to generate funds by selling tokens for actual cash, and threatening to close down all domestic exchanges which do not clearly respect the regulatory terms imposed by the government, it seems like the country will now clamp down even further on bitcoin trading, as all digital token exchanges may be shut down.
The report, which originates from the Wall Street Journal, states that regulators recently told digital currency executives in the country, during a meeting, that they will go ahead and shut down virtual currency trading. It also seems like the government is considering the idea of ending peer-to-peer trading as well, which is often used by individual traders via the internet.
The Beijing government has mentioned that the move is mostly due to the volatility associated with digital currencies, and the fact that they can be used for illegal purposes, such as money laundering. However, no other country other than China has tried to impose a wide-scale ban on bitcoin and other altcoins so far. It has also been speculated that these moves are also being made in order to further prepare the country for the leadership transition that will take place later this year, during the fall.
If the Beijing government does indeed ban the trading of digital currencies, and all domestic exchanges on their market, then this will likely have a big impact on the ecosystem of digital currencies throughout the world, which is bad news. However, bitcoin has managed to recover from even bigger events so far, so most economic analysts are confident that this move will not thoroughly impact the coin.
Regardless, the actual trading between people cannot be banned completely, as coins can be transferred in a variety of ways, and bitcoin exchanges are not always needed!
Based on everything that has been outlined so far, what do you personally think about China’s plans to ban digital currency trading, alongside with the exchanges? Hopefully, better regulatory measures will be put into place, to help avoid such a move. Let us know your thoughts in the comment section below.