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It is no secret that the Chinese government has always maintained a tough attitude towards cryptocurrencies. On the contrary, however, even before the ICO boom, the Chinese yuan made up over 90% of Bitcoin's trading volume in 2016. However, the Chinese government had already started warning its citizens from the dangers of Bitcoin from 2013..
Towards the end of 2017, while the price of Bitcoin was rising to unprecedented levels, many ICOs (initial offers of coins) fell short and most of them were complete scams that robbed people of their hard-earned cash . In a move to protect its citizens, China has banned all activities related to the ICO and has initiated the inspection of 60 major cryptocurrency platforms.
China's position on cryptocurrency
Since September of last year, when the Chinese government has declared a serious crackdown on over 100 cryptocurrency exchanges, China's response to the cryptocurrency issue has remained an absolute "no".
Meanwhile, mobile payment services such as WeChat Pay and Alipay have transformed Chinese cities into some of the world's largest cashless companies. Consumers in China are "using their smartphones to pay almost anything", from transportation to meals and even luxuries like a foot massage.
To judge from this, in China there is a huge market ready for the absorption of cryptocurrencies. The South China Morning Post reports: "Despite Beijing's many attempts to close all local exchange platforms since September 2017, cryptocurrency trading has continued to thrive, with many Chinese exchanges trying to circumvent the ban by reincarnating under names of different domains ".
Although experts believe that news on the temporary ban on CCO and cryptocurrency trade could dampen cryptocurrency merchants' efforts, most have found a way to use VPN software to gain access to crypto trading services offshore.
Furthermore, despite the government's crackdown on all things related to cryptocurrency, the Chinese government has proved to be interested in Blockchain, the technology behind cryptography. It is believed that China is actually interested in developing a national cryptocurrency despite the hash position.
China prepared to create an encryption supported by the government
If the claims of IG Group, a UK-based online financial and trading company, are something to go on, China is well on its way to introducing its own national cryptocurrency. Of course, IG Group's claims are bold and there have been no official statements regarding the name of the national cryptocurrency or the launch date recognized by the Chinese government.
However, IG Group, a company providing educational resources on FX and CFD products leveraged since 1974, insists that government-backed encryption would be introduced alongside the Yuan. The goal of Chinese cryptocurrency, according to IG Group, would be to allow millions of Chinese citizens to access standard banking services.
More government control
Recently, the Chinese government has paid close attention to cryptocurrencies with the discomfort of many market analysts. For some strange reason, the center of government for the development of the information industry continues to track and classify cryptocurrencies, not to mention an encryption agreement signed between South Korea and China.
In light of these events, IG Group insists that the Chinese government's vision is to use its own cryptocurrency to regain control of the country's financial sector. China is already one of the countries with the highest number of miners and cryptocurrency enthusiasts and with a high level of government surveillance and control, it would be easy to force these miners to extract state-owned cryptocurrency.
Even in the absence of an official statement, China has shown interest by carrying out some tests with its digital currency for interbank transfers. The goal, it seems, is to provide a secondary digital currency that would work alongside the yuan. This second digital currency would give the Chinese government more practical traceability of all transactions.
The crypt of the spells of the owner of the state of China condemns for crypts
Market analysts believe that if China officially launches its own cryptocurrency, the results would be devastating for the cryptic industry in general. The IG Group experts acknowledge that any cryptocurrency supported by the government is unlikely to kill Bitcoin; however, they admit that the smaller currencies on the market would have to face harsher times.
Given that all foreign cryptocurrencies are prohibited in China, and without any sign that the ban will be lifted, a reduction in the price of Bitcoin would be inevitable. The IG Group explains that, since the Chinese government obliges miners to work on national cryptocurrency, Bitcoin would have less power and a possible collapse of the market will occur.
China has already proven to be one of the most influential in the cryptocurrency market. After the ban on exchanges of ICOs and cryptocurrencies last year, the cryptocurrency market has entered a bear market that does not seem to end soon.
Final considerations: a chance for an awakening
For now, the future of Criptovaluta in relation to China can not be ruled out. Experts from across the cryptographic sphere express different opinions on the subject. However, it remains clear that China has a bright future with the use of Blockchain technology. Already there are large Blockchain startups sprouting across the country with major players like NEO, QTUM and VeChain gaining popularity and recognition even from the government.
At the moment, even if China imposes a hard position on cryptocurrency trading, mining and investment, Chinese crypto enthusiasts may possess cryptocurrencies, but they are not authorized to carry out transactions. Experts believe that Blockchain and crypto go hand in hand and that while the cryptographic market stabilizes, there is still a chance that cryptocurrencies may experience a revival even in countries like China.
