In September, we have been bombed with news from China, but why does news from a country like China matter so much when it comes to a world-wide and decentralized currency? We should remember that Asian markets are the biggest investors in this new technology, and its prohibitions echoes in fear in the market making a big fall in the cryptocurrencies in general.
It all started when the People's Bank of China reported that had absolutely banned the Initial Currency Offers, according to the Caixin Journal, the White Papers of various projects involved with ICO's had been reviewed and 90% of them were found suspected of fraud. It must be recognized that the ICO market was getting out of control and that intervention for the purposes of public interest was necessary
Later rumors said that the People's Republic of China not only wants to regulate the ICO, but also wants to close the Exchange,
nevertheless, from the impartial point of view, why will China want to ban the Exchange? according to academics, lawyer, central bank regulators and the securities commission list certain reasons:
- lack the license
- The speculative environment of the market produces huge fluctuations in prices
- cross-border payments can evade foreign exchange controls
- Transactions revolve around money laundering and other legal amendments
Now we should ask ourselves this question, are FIAT currencies reliable and represent real support? Are local currencies not exposed to high volatility according to inflation? Are physical money free from the illicit market and money laundry? To me this is just excuses for another block from China.
If we look at the news in China beyond bitcoin, we can see a systematic obstruction of social networks and other computer environments. The Great Firewall of China is a combination of political and technological actions directed to regulate Internet internally. Also known as The Golden Shield, to this date have blocked Facebook, Twitter, IMDB, YouTube, EBay, Skype, WordPress and the list continue. The Great Firewall of China is obviously a controversial mechanism because it is a violation of human rights and a barrier to international trade.
Of course, other regimes like Turkey, Cuba, Belarus, Zimbabwe and Iran, among others, have admired and modeled the technology. We can see that the centralized the country are more likely to support this kind of behavior, and let's not forget that China is a totalitarian regime. In another point of view this news that they are banning the cryptocurrencies are not totally bad.
To prove this, first we have the news that Chinese Exchange companies like ViaBTC, BTCC among others, would close September 31st, this measure was a direct result of the Chinese regulatory declarations. But then, the Chinese exchange company ViaBTC has announced its plans to launch a trading platform based outside of China. According to the Bitcoin news page. The company estimates that a third of its customers are abroad. The CEO Yang Haipo, has expressed the belief that "foreign users will continue to use the ViaBTC platform."
ViaBTC also clarified that its mining group will continue to operate, this release is due to other rumors that China intends to ban mining cryptocurrencies, this rumor is less clear since China is undoubtedly one of the largest miners of the world. To try to silence these rumors we have the impressions of great personalities in this area like Charlie Lee that in twitter he affirms "I have source of confidence that says that it is not certain that China is prohibiting the mining network" also John McAfee, of MGT Capital, also refuted the validity of the rumors related to the repression of mining.
However, if China manages to completely ban the ICO, the Exchange and finally the Cryptocurrency to its inhabitants, which is where it can reach its oppressive level, it is latent the possibility that other countries will take the market, as is the case at this moment with South Korean Exchange that has had more transactions than Bitfinex and Bittrex. Representing this as an escape not only from the Exchange but also from the bitcoin community in general
In conclusion, many people wonder why the Chinese government is regulating, blocking and banning everything related to cryptocurrencies universe. People often see the answers to this question in a very superficial way. We must analyze it in a deeper level, what I want to say with this, is that the cryptocurrencies are the first application connected with the blockchain. Think a little about it, the blockchain can be applied to many different things, it is a utopian world the fact that you do not need a central operation to make transaction, and I believe that the Chinese government is realizing this. What they used to see as a game, it is now getting out of their hands. They began to see it when the ICOs managed to raise hundreds of millions of dollars, although sometimes they were frauds. I believe that China is analyzing this new community that transmits information from person to person in a decentralized way, they are analyzing what this mean for them as a government, and the reason they are blocking the cryptocurrencies is because they do not want this decentralization to exist. I believe that the blockchain and cryptocurrency programmers should be proud to create this utopia where governments feel so threatened. I imagine that in a few years with the inclusion of China or not, the world of the cryptocurrencies will get their way and break the paradigm in which we find ourselves at this moment.