In a decision that could have a severe impact on the price of cryptocurrencies, led by bitcoin, the Chinese government decided to nip what it considers to be a problem: it banned all activity related to digital currencies. “They are illegal,” he determined.
In a measure that became known this Friday, September 24, the People’s Bank of China (BPC), the equivalent of the central bank of Xi Jinping’s country, especially targeted cryptocurrency exchanges that operate around the world, not just those of Chinese origin, such as Binance or Coinbase.
He directly made it illegal for them to provide online services to residents of China.
The market has not reacted yet. However, the measure, although it was only known now, had been published earlier this week. As the price of bitcoin and the rest of the altcoins fell these days, it can be interpreted that the market has already reacted (negatively, by the way) to that disposition.
The rule is an attempt to close a void that was left open in May, after the People’s Bank of China prohibit financial institutions in that country from providing cryptocurrency transaction services.
In the following months, the Chinese continued to invest in cryptocurrencies, but using foreign platforms.
The announcement says that all Chinese citizens who work for cryptocurrency exchanges outside of that country will be “investigated according to the law.” as well as organizations that provide technical support, whether paid or marketing.
That’s how it is, all media or design agencies working for exchanges that have clients resident in China could be investigated by Beijing.
The PBC says it will work together with the Ministry of Public Security and Internet regulators to “clamp down on those suspected of undermining the financial order.”
Beyond the attempts at control, China is one of the countries with the largest crypto market in the world.
According to a calculation by Chainalysis, published by Reuters, user-controlled crypto wallets believed to be in China received digital currencies worth more than $ 160 million in the first half of 2021.
The PBC statement says that “speculation with cryptocurrencies has increased, disrupting the economic and financial order, generating illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes and money laundering.” And he clarifies: “All this seriously endangers the safety of people.”
In parallel, the PBC has everything ready to present an official digital renminbi, which will make it a pioneer central bank in this matter. The digital currency will be tested at the next Winter Olympics in 2022.
If China’s decision were to be extended to other countries, it would be a real problem for marketing and advertising agencies already working for the crypto ecosystem.
This market has been developing with strong momentum in all Latin American countries.
From Mexico to Argentina, little by little a source of income has been generated for the sector that comes from the companies that are part of this segment, from exchange channels to fintech.