Our view: Cryptocurrency and China

  • China accepted cryptocurrency in a big way. With easy access to cheap hardware, cryptocurrency mining is flourishing.
  • China’s cryptocurrency exchange BTCC accounts for 60% of bitcoin’s collective hashrate.
  • In early 2017, Chinese government suspended all withdrawals from cryptocurrency exchanges causing the bitcoin market to plunge sharply.
  • However, in mid-2017, Chinese government amended the cryptocurrency regulatory framework in order to allow withdrawals from cryptocurrency exchanges.
  • This spurred investor confidence in cryptocurrencies causing the market to rise.
  • Recently, Peoples Bank of China is said to be developing its own cryptocurrency. If this happens, China will be the first country to develop and run its own cryptocurrency.
  • With this, China will enable cryptocurrency to reach millions of Chinese citizen with no access to bank services, reduce cross-border transaction charges, reduce corruption and enable detailed analysis of data and draw economic insights in real time.
  • On the political front, a national cryptocurrency could further strengthen the position of the ruling Communist Party of China.

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