We reported earlier on the phenomenon of the ongoing cryptocurrency renaissance in China. From news of an official government cryptocurrency token, to legitimate support from President Xi Jinping; the news has proven a boon for the country’s crypto-financial sector in the midst of crypto-related business reforms.
The country has been laying the groundwork for its forthcoming state-backed token, and domestic crypto industry, through the construction of a legislative and regulatory framework to support it. The token is to be a ‘Digital Renminbi’ which will be a 1:1 digital representation of the national currency.
New Chinese crypto companies have been emerging at a great pace, as well as companies established by expat entrepreneurs from China. Meanwhile, earlier-founded organisations such as Binance (and their products, like Trust Wallet) have established strong global reputations and user-bases.
Success stories like Binance enjoy even greater success in the midst of situations like this – as it only reduces its line of competitors.
Of course there will be growing pains when any country instigates a rapid acceleration of technology and industry and with China, those ‘pains’ are always more than likely to affect entrepreneurs and business owners to a greater extent than the government itself.
China is notorious for its strict laws, a hardline stance on law enforcement, and controversial ethics when it comes to the circumvention of human rights standards; as well as an aggressively colonial and imperialist approach to international politics.
The latest crackdown is a continuation of a recent canon of criminal convictions in China reaching back to late 2017, when the country implemented a series of of cryptocurrency trading and mining bans.
CryptoSlate reports that, in total, 173 exchanges and token issuers related to cryptocurrency have been “shut down”.
On November 22, Chinese media outlet Sohu reported the apprehension of ten suspects connected to an illicit cryptocurrency exchange called BISS, as well as the closing of their local offices by police in Beijing.
The same date saw Shenzhen authorities identify 39 cryptocurrency exchanges it had determined were operating illegally, against existing trading bans. According to Cointelegraph, the investigation saw contributions from various government institutions: including the People’s Bank of China (PBoC).
Even Binance could not escape the ire of Chinese authorities – with authorities allegedly raiding an office which was later denied by the company (and otherwise described as a ‘call centre’ in other reports).
Could this be a means of whittling down serious financial contenders to China’s national currency? Or is the government merely setting serious examples for others through this crackdown.
Compared to actioning in the United States by the SEC, CFTC, and FinCEN (against Telegram’s TON and Grams, for example); China’s crackdown has been comprehensive and consistent in its rulings, with relatively clear definitions informing government action.
Though if you compare it to countries like Japan and nation-states such as Singapore however, it lags far behind.
Whilst not necessarily a ‘leading’ country in blockchain and cryptocurrency just yet, China is certainly on its way to getting there. There is no doubt, however, that there will be more than a few casualties on the way.