The Chinese crackdown on cryptocurrencies continues with another batch of news that should send shivers down your spine. The news below comes on the back of the recent ICO ban and announcement on China forcing the closure of fiat-to-Bitcoin exchanges.
Beijing News Reports Bitcoin Trading Executives Banned from Traveling
On September 18, Beijing news reports that Bitcoin insiders including executives, owners, shareholders and managers of Bitcoin exchanges are forbidden to leave Beijing in order to co-operate with authorities. As previously reported, Bitcoin exchanges were ordered to close down, and report to authorities on a daily basis, even asked to upload all data onto DVDs.
OKCoin and Huobi Bans All Cryptocurrency Trading In China
It was previously reported that all non fiat-to-Bitcoin services would remain intact, however, that has now changed, with OKCoin and Huobi recently stating that all trading will cease for all Chinese residents. OKcoin and Huobi will remain operational for users overseas but all trading within China must close before October 31st. It is still unclear if this latest move is a temporary measure or a permanent one.
The Chinese Government creates “The Trusted Blockchain Lab”
In a strange turn of events, the Chinese government has created a blockchain research institution named the Trusted Blockchain Lab. The lab will be operated by a government arm named the “Academy of Information and Communications Technology”.
Sun Guofeng, of the People Bank of China, stated that the ban on exchanges and ICOs “should not prevent relevant financial technology companies, industry bodies and other technology firms from continuing their research into blockchain technology.” The catch, however, is that all the research must be done under the watchful eye of the government for there are criminal activity and abuse in the cryptocurrency sphere.
The latest news concerning the research lab gives mixed messages, as while the government is cracking down on exchanges and ICOs, they are at the same time researching blockchain technology.
There is a range of possibilities at play, one of which is that the government may be creating its own cryptocurrency (and/or other blockchain-based services) on a private blockchain, giving them the ability to track of all transactions. If this is indeed the case, we may see cryptocurrencies move down an unintended path.
A New Era
The buying pressure on Bitcoin and alternative currencies as a whole have seen the price skyrocket since January of this year. This buying pressure has come from all sides of the globe, with increased volumes from other Asian countries like Japan and South Korea. Despite China being once the trend leader, this can no longer be said. While the price did drop significantly, it did not drop as far as one would expect for a country that was once the main market for Bitcoin. A new, global era for cryptocurrencies has begun.
“China’s effect on the price of Bitcoin is mistakenly in vain … what they have been a party to is the increased decentralization of the network and they have unwittingly set into motion a drive for further research and development for crypto to remain outside the tentacles of the monetary elite. Times are changing rapidly.” – House, CEO of the Core Group.
China, seeing Bitcoin as too important to just roam free, is now taking steps to completely control the coin. This, at first sight, can be seen as a negative. However, it can also be looked at as an admission that decentralized technologies can have an impact and disrupt the legacy system. China may be locking down their own country, but other countries still remain free to trade and allow citizens to participate in ICOs. If China thinks that all Bitcoin lovers will remain in mainland China for the near future, this may be wishful thinking, for we may see large flocks of capital flight moving abroad.