China really doesn’t want external cryptocurrencies to function in its country.
The Internet is abuzz with news that China is all set to ban the exchange of Bitcoin and other Cryptocurrencies on its domestic exchange. This news comes less than a week after it was revealed that China had banned Initial Coin Offering(ICO), which has recently emerged as the most effective way for startups to raise funds.
After the ICO ban, the global cryptocurrency market lost billions of dollar. But just as the market began to recover from that loss, China has gone ahead and expressed its interest to ban cryptocurrency exchanges. And now the value of Bitcoin and other cryptocurrencies are tanking.
Bloomberg has reported that according to insiders, the ban will only apply to trading of cryptocurrencies on exchanges while there don’t seem to be an urgency is stopping over-the-counter transactions. Since the news started floating a few days ago, Bitcoin’s value has seen a significant slump.
Zhou Shuoji, a founding partner of FBG Capital, which invests in cryptocurrencies, addressed China’s ban on cryptocurrency exchanges by stating, “Trading volume would definitely shrink. Old users will definitely still trade, but the entry threshold for new users is now very high. This will definitely slow the development of cryptocurrencies in China.”
China is the world’s biggest cryptocurrency market, hence the ban on cryptocurrency exchanges and ICOs comes as a shock. The country makes up 23% of Bitcoin trades and interestingly some of the world’s biggest Bitcoin Miners are from China.
The country’s motives behind the ban are not understood at this point. However, Edith Yeung’s China Internet Report 2017 revealed that China is working on its own cryptocurrency so it is possible that the country is giving external cryptocurrencies the same treatment it gave to Facebook, Google, and Uber.
To understand more about Blockchain, Bitcoin, how they are created, and how to buy/sell them in Pakistan, read our detailed guides on Cryptocurrency in this section.