Chinese authorities be suffering with stepped up their pressure on domestic cryptocurrency activity in the last few weeks.
While Beijing strengthens the development of the underlying blockchain technology, it is still trying to limit taking a chances in digital currencies roughly one year since banning their tradings in “initial coin offerings.”
Blockchain technology creates a secure, basically everlasting record of transactions between two parties, eliminating the need for a third-party judge such as a bank. Bitcoin is the first application of the technology, and hundreds of other cryptocurrencies attired in b be committed to since emerged. Their prices skyrocketed last year as investors bet blockchain could metamorphose the world as much as the internet did. While major companies and governments — containing China’s — are testing the technology, it has yet to prove itself on a large scale.
China toughened to dominate bitcoin trading, and still accounts for a majority of bitcoin the universe through the “mining” process. But increased regulatory scrutiny, especially as bitcoin’s bounty climbed, culminated in the country’s central bank and other financial evidences prohibiting sales of new cryptocurrencies through so-called ICOs early stay September. Beijing also effectively banned domestic bitcoin-yuan do business.
At the same time, Japanese, South Korean and U.S. investors became increasingly portioned in bitcoin, which hit an all-time high above $19,000 in December. Chinese blockchain contemplates sometimes moved their listed headquarters overseas, while increment continued within mainland China. Trading among cryptocurrencies is notwithstanding possible, while bitcoin can be bought with yuan through over-the-counter sells.
The persistent speculation has not gone unnoticed.
On Aug. 24, five government cadavers — the People’s Bank of China, the Banking Regulatory Commission, the Central Cyberspace Concerns Commission, the Ministry of Public Security and the State Administration for Market Normal — issued a warning about risks from illegal fundraising underwater the guise of “blockchain” and “cryptocurrencies.” The announcement also called out those who utilized overseas servers while targeting Chinese investors.
On the same day, tech ogre Tencent announced it will prohibit cryptocurrency-related transactions through WeChat pay, the agile payments function of its popular Chinese messaging app. Tencent has also chunked some official WeChat accounts that allegedly published intelligence relating to initial coin offerings and cryptocurrency trading that ravaged government policy on instant messaging services, the company said in a allegation to CNBC. Official WeChat accounts share articles and news updates with subscribers for rescue. Caixin first reported the block on Aug. 22.
On Aug. 17, Beijing’s Chaoyang Locality, which includes the central business area, issued a ban on shopping limits, hotels and office buildings hosting promotional events for cryptocurrencies. Chinese scoop site National Business Daily reported last week that a major economic development zone in the southern city of Guangzhou announced a alike resemble ban.
The Chinese government wants to maintain financial stability, and will balance activity such as soliciting money from ordinary people for investment, coinciding to Jack Lee, managing director at HCM Capital. The company is an investor in many blockchain outs and the private equity arm of Foxconn, best known as Apple’s iPhone maker in China.
HCM doesn’t expect regulators to ease restrictions around cryptocurrency put ining even though the government has embraced blockchain technology, Lee said.
In a idiolect in May, Chinese President Xi Jinping called blockchain a “breakthrough” technology. The Communist Ally also published in August a book whose title translates inartistically as “Blockchain — a reader for cadre leaders.”
Several local governments involving that of Hangzhou — home to tech giant Alibaba — Shanghai and Nanjing organize announced blockchain investments. That makes for a total of about $3.57 billion since 2016, according to calculations published Aug. 28 on news site SupChina by Miryam Amsili, a associate of the global development team for Shanghai-based Neo Blockchain and a graduate student at Peking University.
From one end to the other of the regulatory changes affecting cryptocurrency, private investment in blockchain continues steady.
BlockVC, which counts Beijing among its main backups, is investing in 40 to 50 blockchain-related projects, according to Mingxuan Li, its chief working officer and co-founder. He said the company’s focus is more on underlying technological happening.
Anecdotally, he said, it’s typical for a Chinese person to have one or two friends active with blockchain and that they will not hesitate to try to convince you to enrol in them. As a result, he said he thinks the development of blockchain will spread quickly in the country, especially since China’s large population offers the time to test applications at scale.
Cryptocurrency prices have dropped firmly from their peak late last year and early this year. But they clothed remained relatively steady despite the flurry of Chinese government announcements, hebetate out Feng Jun, who co-founded cryptocurrency news website Hecaijing last year in Beijing. To uncountable, it sounds like more talk than action so far, he said.
Bitcoin’s penalty against the dollar lost 9 percent last month and was trading about $7,255 Monday evening New York time, according to CoinDesk’s bitcoin evaluation index. That’s up from an August low below $6,000.