The Chinese government has banned all commercial events related to crypts and blockchains in the region, after encouraging local financial authorities to accelerate the development of blockchain technology.
Red Li, the co-founder of 8BTC and Chinese cryptocurrency researcher, shared a document issued by the Chaoyang District government in Beijing, which ordered local financial authorities and police to prohibit offices and hotels from host events related to encryption.
Beijing Chaoyang has released a file to prohibit offices, hotels from hosting promotions token. pic.twitter.com/vxtyld9q3n
– Red Li (@redtheminer) 22 August 2018
Why the Ban?
Previously, cryptographic events were closed by local police during a period when the government was implementing new regulatory frameworks surrounding cryptocurrency trading.
At the time the government clarified its position on encryption and reiterated that while the country supports the development of blockchain technology,
Analysts suggested that the ban be imposed as part of a larger initiative to allow more stringent capital controls to prevent local investors from using cryptocurrencies as a tool to move funds outside of China into foreign markets.
Around the same time, the Chinese government set up a task force to suppress local investors who stored their wealth in foreign markets to evade taxes and official authorities to investigate savings accounts and assets owned by millionaire investors .
The Chinese government's ban on the negotiation of cryptocurrency was initiated at a similar period during which the government strictly prohibited investors to conserve wealth in alternative value stores.
However, the government's last decision to curtail crypto and blockchain events was unforeseen by analysts and local experts, mainly because the government was optimistic about the development of blockchain and distributed systems.
At the beginning of the year CCTV, China's state-owned national television channel, reported that the blockchain could have a 12-fold impact on the global Internet and global economy .
"Blockchain is the second Internet age, blockchain is 10 times the Internet, and Blockchain is the trusting machine," said CCTV.
The CCTV's positive comments were followed by the Chinese government's courageous decision to allocate at least $ 3 billion to finance emerging blockchain and start-up projects, to remain at the forefront of blockchain development.
On May 24, the State Council of China encouraged local finance agencies and technology centers to accelerate the development of the blockchain, to distribute and market blockchain systems on a larger scale.
"Building a regional equity market in Guangdong, according to the capital market opening, the timely introduction of Hong Kong, Macao and international investment institutions to participate in transactions. financial technologies and we will accelerate the research and application of blockchain and big data technologies under the premise of legal compliance, "said the Council.
Considering the optimistic and farsighted approach of the Chinese government to accelerate the development of the blockchain, its most recent decision to ban blockchain and crypto events, in which most startup blockchain and investors establish strategic connections and partnerships, contrasting with the positive position taken by the government from the start of 2018.