Cryptocurrency in China: The Latest News

China is a huge market cannot be ignored, especially in the emerging cryptocurrency market. Numbers of local exchange platforms exits in China, thousands of crypto traders show a positive attitude toward the prosperous development of the cryptocurrency market. Nothing can make them pull back even though China authority has kept controlling cryptocurrency transactions through intense regulations to ban any activities via Mainland. Industry observers still hold an assured perspective toward Chinese investors that it is an innate finding way to circumvent increasingly compressing controls over cryptocurrency trading by Mainland government, making it practically impossible to ever impose a complete shutdown on trading.

Therefore, even under highly supervision by authority and undertaking extremely risks, China crypto-traders remain proactive mindset and carry out the transaction still but under the table. That is, despite the crackdown on trading due to new policy conducted by the government, Crypto and blockchain in China are still alive.

WHAT IS CRYPTOCURRENCY?

Let’s briefly examine what we mean by terms like cryptocurrency. It is a collective name for virtual currency which is manufactured by millions of computer 24 hours a day and 7 days a week automatically. It is originated by a style of software running a series of complicated mathematical puzzles, then a virtual currency coin gives birth with a specific code. The code makes it differentiate from each other which like personal ID. Unlike the physical currency should be controlled, produced, issued under government manipulation or national authority, cryptocurrency stands all reverse traits to be available produced, operated, issued by individuals and merchandise online. The key difference is that cryptocurrency in the form of tokens or “coin” as digital money. As people are more immersed in the digital world and prefer to do a transaction online, the surge of intangible currency is an irresistible trend in the future. Many may consider cryptocurrency like Bitcoin, yet Bitcoin become the most popular and well known virtual currency, there are many other digital coins called Litecoin, Ethereum, Ripple and so forth turning into the spotlight. In fact, there is more than 1600 cryptocurrency in existence right now and some of them share immense popularity in a dedicated demographic. Regardless of the extensive size of cryptocurrency industry, the field of virtual currency is always expanding, and a fresh faddish digital coin may be released tomorrow without expectation.

WHY IS CRYPTOCURRENCY SO APPEALING?

In terms of the unique features of cryptocurrency, to invest or own virtual coins stand as a fashionable behavior. And it may lead to a high return on investment or high preservation with long holding. Because it is intangible, free of government manipulation, explored by the person, cryptocurrency catches much more people’s attention. Here below elaborate more factors why Cryptocurrency getting progressively attention.

1. Free of government manipulation-While physical currency is guided by government, cryptocurrency does not follow to any central authority that it can be traded by cutting out the middleman. Further, since cryptocurrency is not tied to any countries, it can be transmitted without borders. That, regularly, paying overseas is a lot way easier.
2. Trading anonymously-differentiate from the real-world transaction, cryptocurrency can purchase anonymously. All the transactions undertake via each unique wallet ID, so others will not recognize you through the whole buying and selling process. Also, with the high privacy on trading intangible coins, it is safer for the trader online from getting stolen.
3. High risk. High returns– Since cryptocurrency does not govern by the centralized authority, the value of each type of digital coins can fluctuate enormously by its market value. That is, ROI can be surprisingly big or small. With possible extremely high ROI, it always brings a lot of money for investors. And this is what attracts experienced investors to take challenges to earn more by their professional skills. Evidence from below charts from Coindesk indicate that a rapid growth of margin happened at the beginning of 2018. Which makes you a millionaire in one day is cryptocurrency.

CRYPTOCURRENCY HISTORY IN CHINA MARKET

Established in 2011, BTCCHINA as the first Bitcoin exchange platform was considered as the pioneer in China Cryptocurrency market. Gradually, following is the development of Cryptocurrency trading platform.

Soon comes to the year of 2013, bitcoin has entered China and following the development of Cryptocurrency trading platform, the expansion of China virtual currency boost. The Cryptocurrency market in China grows at a stable pace and the top three trading platform established. Cryptocurrency trading reaches the highest point in the middle of 2017. And a little bit cooling down from September 2017 due to China authority regulation of Cryptocurrency transaction.

Aside from the Cryptocurrency market growth, there are a lot of Cryptocurrency derivatives originating from China. As a home to the three largest crypto mining rig manufacturers, China views as an undisputed world leader in Bitcoin mining. Not only does China manufacture most of the world’s mining equipment, but the country also houses some of the world’s biggest mining pools- BTC.com, AntPool, ViaBTC, F2Pool, BTC.TOP, controlling approximately 70% of the network hash rate.

Abundant transaction activities occur on China generated cryptocurrency every day. China cryptocurrency traders became the most active community in the world. Statistics from Block data shows the China cryptocurrency trading platform occupying the top 2 in the top 3 according to transaction quantity per day. Further, till April 2018, there are two platforms daily transaction amount exceeding 10 billion RMB; both are China cryptocurrency platforms.

In the case of numerous China investors in cryptocurrency market, as well as lots of well-developed and advanced China platform serve for digital currency to show the increased demand, in spite of the negative news and regulation against cryptocurrency, local cryptocurrency trading future is in the bright side.

NATIONAL POLICY AGAINST CRYPTOCURRENCY TRADING

Cryptocurrency market got a brutally punch after China government announced a regulation to ban cryptocurrency trading platform and violate domestic digital currency production at the September 2017, and reaffirmed its negative stance towards the market this year.

In 2018, the Chinese cryptocurrency industry and the market saw a stricter crackdown on cryptocurrency trading initiated by the local government and the People’s Bank of China (PBoC), the country’s central bank. In early February, the Chinese government began to block Bitcoin and cryptocurrency-related websites through its “Great Firewall,” essentially disabling anyone within the country from accessing Bitcoin exchanges and digital asset trading platforms.

The government’s ban on Bitcoin-related sites and platforms signaled its intent to essentially disallow any cryptocurrency activities within the country, given that the use of virtual private networks (VPNs) is against the Chinese law.

Why government so strongly defeats the legislation of cryptocurrency is three main reasons: affecting market stability, unable to fully control and audit, not a healthy currency system.

In August this year, China government attempts to go further to block offshore cryptocurrency exchanges that provide service to China investors by stepping up their monitoring, reported by a Chinese newspaper The Shanghai Securities Times.

Despite multiple attempts by Beijing authority to shut down all local exchange platforms since September 2017, cryptocurrency trading had continued to prosper, with many Chinese exchanges attempting to skirt the ban by reincarnating themselves under different domain names.

But even under this circumstances, China centralized authority tried to go further to block cryptocurrency online. Recently, a lately warning and potentially increased monitoring of foreign platform is targeted at a batch of small transaction claimed to be operated by foreign entities but in fact operating in China claiming they have outsourced their operations to a Chinese company. Besides that, a cryptocurrency platform with a landing page in Chinese draws more attention from Chinese supervision institution to investigate them if operating inside China even though the server locating outside Mainland.

Following more strict policies to prohibit trading cryptocurrency, Chinese traders have to face more and more severe digital currency market. But, as always do, Chinese netizens can find a way to crack the firewall secretly and escape from the authority monitoring. That won’t be a termination for cryptocurrency traders in China, but a new obstacle to overcome.

POSITIVE ATTITUDE TOWARD CHINESE INVESTORS IN LONG TERM

In early February, the Chinese government began to block Bitcoin and cryptocurrency-related websites through its “Great Firewall,” essentially disabling anyone within the country from accessing Bitcoin exchanges and digital asset trading platforms.

What came after the increasing regulations against digital currency trading is a huge crackdown on the market, the combined trading volume dropped down dramatically from 33 percent to US$2.5 billion, compared with the volume of US$3.73 billion recorded on August 16.

Although the condition in China seems tough this time, still, local developers are continuing to introduce innovative Blockchain projects on the global stage. A ceaseless trend in cryptocurrency trading in industry players in China is keeping in demand.

Moreover, according to the characteristics of cryptocurrency transaction, said by the industry observers, “as long as trading platforms sever remained outside China and the transactions implemented peer-to-peer with only the digital wallet code, and keep decentralized, it would be a great challenge for authorities to monitor and so completely block access. Though regulators can trace the transactions through virtual private networks (VPNs) and by shutting down VPNs, can equally shutting down the route of certain cryptocurrency trading.”

“However, traditionally it takes numerous conversations with different stakeholders to reach a consensus on configuring a firewall, which lengthens the process.” said by the professionals. And as there are no current or foreseeable restrictions on using VPNs inside Mainland, providing a potential loophole for traders to access exchange platforms.

A surprising fact is that after the regulations of shutting down exchange platform and trading announced, former Chinese cryptocurrency exchanges platform like OKEX and Huobi have continued to thrive over the past several months instead, processing over $1 bln on a daily basis.

What the platforms or entities do to deal with this challenge is relocating immediately after the ban on cryptocurrency trading was imposed in October 2017 to HongKong, and thus former two of the largest Chinese cryptocurrency exchange platform can serve both Chinese and International customers. Meantime, they are not constrained to the Chinese prohibition of cryptocurrency exchanges but also experiencing a massive surge in daily trading volume and demand almost immediately after the immigration.

Further, a Chinese platform called Huobi brings in partners to launch a new digital trading platform amid the market slump. The company also moved their headquarters from Beijing to Singapore the same way after China authority crackdown all cryptocurrency exchanges and initial coin offerings.

A PROSPEROUS FUTURE OF CRYPTOCURRENCY

Even under the circumstances that a huge slump on the cryptocurrency market after the ban by the government, industry seniors took it as a short-term phenomenon, rather a long-term resulting condition.

According to The Shanghai Securities Times report, regulators are working with third-party payment operators to stop processing transactions suspected to be associated with cryptocurrencies. In spite of the government’s ceaselessly effort to completely stop cryptocurrency trading and Blockchain related projects, the industry player are skeptical on whether, or how, such payment can be easily recognized and the demand for digital currency investment within the local market is chronically increasing that there will be scaled enterprise would like to be involved.

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