China’s regulatory authority has given another push to cryptocurrencies by imposing a ban on all cryptocurrency transactions on September 24. The move comes as the government began recovering from a June ban on cryptocurrency mining activities.
Fear, uncertainty and suspicion (FUD) caused by the ban caused Bitcoin (BTC) to crash nearly 9% in five hours, dropping from হাত 45,000 to 41 41,142. Shortly afterwards, Alibaba announced that it would ban the sale of cryptocurrency rigs and related accessories from October 8th.
However, the flagship cryptocurrency has since returned to trading, exceeding the pre-ban level of about, 50,000,000. At the time of writing, BTC is trading in the 47,300 range. The recovery could be backed by two favorable developments: US Federal Reserve Chairman Jerome Powell noted that the United States has no intention of banning bitcoin or cryptocurrency and that Iran has lifted its temporary bitcoin mining ban.
This is not the first time that BTC or the market as a whole has recovered from FUD due to China. According to Cointelegraph’s analysis, cryptovers have returned a dozen times from China’s crypto bashing. This example marks another of these inevitable recovery.
In addition to the immediate fall in token prices as a result of the ban, the long-term impact on crypto business and investors in China is widespread. Hubi Global, the most widely used cryptocurrency exchange in China, by volume, immediately stopped crypto transactions in accordance with regulatory guidelines for its Chinese investors.
In addition, the Exchange has unveiled a plan for their users in China that ensures that users can protect their assets before their accounts close permanently on December 3rd.
“Customers will be able to transfer their assets to another exchange or wallet in the next few months. If customers do not see our latest announcements or do not see them, we will provide other ways to protect customers’ assets and withdraw them. ”
Unlike the previous instance where China has cast a shadow over the cryptocurrency or declared a “ban”, this time there seems to be no gray area or loophole that allows crypto businesses to continue their services in the country.
In the case of many countries, for example, China’s hostility to crypto seems to combine its own central bank’s digital currency (CBDC), the promotion of the digital yuan.
Ariel Zetlin-Jones, an associate professor of economics at Carnegie Mellon University’s Tapper School of Business, told the Quintelegraph:
“China clearly wants to promote the digital yuan. One way to do this is to remove its competitors by banning crypto activity so it seems reasonable to consider this motivation as an argument of their policy.
Christine Bogiano, co-founder and president of the Cryptocurrency Exchange Cross Tower, told Quentelgraph: “China seems to be choosing to control innovation, and its actions indicate that cryptocurrencies can be a threat to the digital yuan as much as cryptocurrencies are not allowed.”
The government is pushing its CBDC initiatives across the provinces so far that Xiaon’an New Area enabled the country’s first blockchain-based pay transaction in June this year.
It shows unwavering faith and commitment to digital currency initiatives, compared to other major economies where the focus of discussion still revolves around the security and reliability of digital currencies. So, the move could certainly be an attempt to curb the proliferation of “private” cryptocurrencies and push users towards the digital yuan in China.
China’s loss, America’s gain?
Hubi’s June further noted that, as the exchange has been expanding its footprint in various countries in recent years, businesses outside China already occupy about 70% of the firm’s entire portfolio.
In July, after a series of crackdowns on bitcoin mining in China, the difficulty of bitcoin mining was immediately affected, with a 30% reduction. Jaitley-Jones said the same results are now being seen in the Ethereum blockchain where large ether (ETH) mining pools in China are now going offline. Jaitley-Jones continued:
“Reducing mining difficulties reduces mining entry costs and creates opportunities for new entrants to the mine. While I believe that it could be beneficial in running decentralization in mining, it is unclear whether this is an opportunity for the United States in particular.
Charles Allen, CEO of BTCS Inc., is a global business provider of blockchain infrastructure. He told Cointelegraph: “Blockchain technology has the power to change the world in the same way. Simply put, they are the future of money and beyond.”
Allen said that if China does not want a hand in development and innovation, it is a 100% opportunity for the United States in the long run.
Related: The crypto community concerned about the impact of infrastructure bills on DFI
U.S. Senator Pat Tomio has the same opinion, Writing On Twitter, “China’s authoritarian campaign on crypto, including #Bitcoin, is a great opportunity for the United States. It’s also a reminder of our huge structural advantage over China.”
The opportunity is huge for the United States and other major economies, as various sectors of the crypto business, such as exchange and mining, need to relocate to China and thus, contribute to employment opportunities and sustainable capital flows in the surrounding economy.
Although there is complete clarity about the law of crypto business and services, individual investors and cryptocurrency holders are still unsure whether possession of cryptocurrency is illegal. Bogiano claims that although China-based investors cannot trade in cryptocurrencies through exchanges, over-the-counter access to the crypto market is relatively unaffected.