Why did China shut down Bitcoin?
Why did China shut down Bitcoin? The level of concern in China towards BTC, as w
Why did China shut down Bitcoin? The level of concern in China towards BTC, as well as the reasons for its rejection by the Chinese government, is due to its anonymity, which has led to the collapse of the global cryptocurrency market.
Shortly after the US government announced a complete ban on trading Bitcoin, an interesting event occurred in China: the People’s Bank of China decided to stop providing services to individuals and businesses. According to reports, the central bank has suspended all transactions related to virtual assets. However, from today onwards, these companies will no longer provide platforms or products for financial services to people. So why did China shut down Bitcoin? China currently has over 20 trillion users. But that doesn’t mean they don’t have the ability to control the value transfer system in this digital world. In China, Bitcoin is increasingly seen as a “Ponzi scheme” as a means of payment. China currently holds around 32,000 BTC (equivalent to 100 million US dollars) and there is a very big flaw in it – it cannot be converted into legal currency. China’s move not only caused a decline in the price of Bitcoin, but also seriously affected those who hoped to avoid inflation. In addition, there are two main reasons why “China wants to stop the development of the encryption industry”:
Firstly, the Chinese government does not allow the use of private funds for purchases. This is because the central bank maintains the sovereignty of the country by issuing its own currency and often puts the country in crisis in order to maintain the dominance of the US dollar. Secondly, the Chinese government is unable to regulate the cryptocurrency activities of any other country, thereby restricting the ways in which other countries adopt new technologies. Therefore, the Chinese government has to take measures to restrict the development of new token producers entering the market. So if some form of ban continues, it may also affect US financial policy.
So for some people, they believe that China should completely abandon the innovative approach of using existing technologies such as blockchain to achieve economic liberalization. For example, China can establish an AI-based technology development team and an open-source software framework to build the world’s most powerful computing resources using distributed networks and apply them to various purposes.
Finally, the Chinese government has not supported the progress and development of the cryptocurrency industry like other countries have. In fact, while we know that China is trying to cope with the growing international demand for Bitcoin and other cryptocurrencies, as well as their increasing usage, in the past few years, Bitcoin has become a daily commodity and service for many people as its applications have gradually expanded. According to data from the Cambridge Centre for Alternative Finance at the University of Cambridge, in 2017, less than half of the global market was controlled by US investors. However, in the US, only 1% of investors are willing to invest in cryptocurrencies, or at least have no interest in buying or selling them, especially outside of the US.
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