The People’s Bank of China, the country’s central bank, claimed in a recent note that China’s share of global Bitcoin (BTC) transactions has rapidly declined from over 90% to 10%.
The Chinese central bank’s Financial Stability Bureau published a comprehensive note on Wednesday analyzing the impact of the cryptocurrency crackdown on financial markets.. The official notice claimed that all peer-to-peer exchanges in the country had been eradicated, finally curbing the hype around digital currency transactions.
A Google translated version of the note read:
“The global proportion of Bitcoin transactions in China quickly dropped from over 90% to 10%. Illegal financial activities such as disorderly handling of finances and suppression of illegal fundraising crimes were severely cracked down on.”
China is among the few nations that have maintained an outright passive stance against the use of cryptocurrencies from the very beginning. The country’s first ban came in 2013 when it banned banks from handling Bitcoin transactions.
This was followed by the banning of local cryptocurrency exchanges in 2017, forcing them to shut down their operations entirely. Later, the country stepped up its crypto crackdown efforts in 2021, where it conducted multiple regulatory operations to eradicate Bitcoin mining from the country and, by September 2021, made all cryptocurrency transactions illegal.
According to data from Statista, the annual share of Bitcoin’s trading volume in digital yuan dropped to almost zero in 2018, after the ban on cryptocurrency exchanges.
The trading volume of BTC in the Chinese yuan could have fallen to almost zero, but the decentralized nature of Bitcoin makes it impossible to ban it.
After the ban on local crypto exchanges in 2017, many Chinese traders turned to foreign crypto exchanges via VPN. When the Beijing government banned foreign exchanges from offering any services in mainland China, Chinese traders flocked to decentralized finance (DeFi) to trade anonymously.
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