China, Split On Cryptocurrency and Blockchain

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China, Split On Cryptocurrency and Blockchain

Covered in our previous blog, we mentioned that China holds three-fourths of the Bitcoin mining operations in the world. With such power, China would have been a powerhouse for cryptocurrency but the authorities in China were banning crypto. In recent news, different cities in China seem to have a split idea whether to accept or ban crypto.

China On Crypto and Blockchain

China’s Past Regulations

The main concern most countries has, not just China, was the decentralization of power (control of the dollar value) and prevention of crypto being used for illegal activities.

The government did allow mining companies to operate but as crypto popularity grew, a lot more regulations started to come into play.

Cryptocurrency Ban

Regulations such as:

With the above regulations, crypto pricing did drop but with neighboring cities such as Hong Kong where crypto was not regulated, the price bounced right back.

China’s Step Towards Allowing Crypto

With China being home to three-fourths of the mining operations in the world, taking a step towards the acceptance of crypto and taking the initiative to promote blockchain would benefit the country.

The country as a whole is still operating under the regulations mentioned above but local governments in Shanghai, Shanxi, Henan, Guangzhou, Guiyang, and Hangzhou have taken their own stand. The local governments are creating policies which promote the idea of blockchain development. Shenzhen is second to follow suit of Hangzhou in the setup of a blockchain fund. Shenzhen’s blockchain fund is valued at $79.2 million while Hangzhou’s blockchain fund is valued a $1.6 Billion. Both these steps show a huge step in local governments support for blockchain and crypto’s future.

How This Will Affect The World

With China slowly taking a turn towards the acceptance of crypto, this would have a huge impact on the value of crypto. This change is on top of the recent regulatory changes from Canada, Ukraine, and South Korea. With countries taking steps in both the regulation and promotion of blockchain and crypto, other countries would need to follow suit to not lose their valuation of the dollar. If a country bans or does not allow crypto, the funds from crypto investors will be sent out of the country to locations where crypto and blockchain is allowed. This would increase the dollar valuation of other countries and weaken others.

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