The government of China is advancing its campaign against the digital currency sector as of mid-September 2017.
The government started its move by announcing a ban on all initial coin offerings (ICO) in early September.
There are also rumors about the possible shutdown of all local Bitcoin exchange platforms in the country.
In his tweet, Chinese Bitcoin mining hardware firm Bitmain co-founder Jihan Wu, however, claimed that the rumors hint of tougher regulations and temporary closures, rather than an outright ban.
Meanwhile, the National Internet Finance Association (NIFA) has claimed in a statement that any virtual currency exchange currently operating in China has no legal authorization to engage in such types of business.
There’s still no definite clear warning or threat that individual Bitcoin traders will be slapped with criminal charges by the government. The NIFA is a government-backed self-regulatory organization that was established by the People’s Bank of China (PBoC). Its members include banks, brokerages, consumer finance companies, and funds.
Possible effects of digital currency ban in China
The implementation of a complete ban on cryptocurrency trading in China may have major consequences, as the country is home to one of the most active Bitcoin trading activities around the world. The New York Times reported that a large-scale mining farm in China accounts for nearly one-twentieth of the total daily virtual currency production worldwide.
In his comment, Guanghua University professor Liu Xiaolei claimed that a total cryptocurrency ban in the country is “neither realistic nor feasible” due to the industry’s magnitude.
Government-sponsored Institute of Finance and Banking researcher Hu Bing, meanwhile, said that a possible ICO ban may only be temporary and not permanent. He claimed that the ban may only be implemented until the Chinese authorities can find an effective solution on how to regulate the new technology.
By Lisa Froelings