China has been know to be a highly controlling state, in that nothing goes into the their system without outright scrutiny and mastering of the Chinese government. History will bring us to the understanding of how true this is, China is a controlling state. Embargoes and restrictions can be placed on any state threatening entities , plenty will understand that
have had dealings with china.Foreign businesses are less favored, a state where with clone of foreign business is highly encouraged and empowered, instances goes from Ebay to Uber .The pervading nature of China market has been leveraged by the Chinese communist state, there is the population of 1.4 Billion people ,and strict control of products which the people are exposed to by the Chinese govt.
An Argument for china being more an innovative state than they are assumed to be , as we know from history , China was the first state to adopt paper currency, but been a controlling state , the growth of research, and innovations is limited, but they try to keep up to par by studying and cloning new techs and innovations to fit the governments master plan of control and limitations, this makes them lag behind in innovations in my opinion .Innovative Environment needs freedom to foster growth , why Americans have embraced Greeks ruling style.
The Chinese government is doing a much harder work trying to bridge the gap with regulations and innovations which doesn't work so well with limitations, The Chinese government can be said to want to be the "master of everything" , like the saying goes "Jack of all trades master of none". They need to give a lot of freedom to the capitalist , technologist, businesses , community to express themselves freely , the state is becoming too big they can not control and scrutinize everything killing true competition and growth.
Currently there has been a ban on illegal token sales , popularly called ICO ,rumors that the government will be banning all bitcoin to CNY trades, some say a ban to all crypto currency exchanges in general, with some News blogs describing it as "Death to bitcoin", "End of Cryptocurencies".My take of this is simple , after reading all the articles and listening to the stakeholders with "Chinese insiders connections" , is that China craves to control their crypto space , a state which successfully curbed the out flow of CNY and banned Bitcoin and crytocurrency exchanges a couple of times should know how resilient bitcoin is right? Of course they do, which is why I feel people are blowing this out of proposition , China's trading volume used to be 90% as at December 2016 but after the January suspension of trading , bitcoin still rediscovered a new all time high without the Chinese market per say .
Bitcoin has won the battle with the Chinese government flawlessly and will still do ,the Chinese government knows, the blockchain in itself is a magnificent innovation that has come to stay and the Chinese government is taking it seriously; They know it will survive without China;They know ,they will have to act fast to leverage on its advantages and control now before its too late;They know there are various means of purchasing digital assets even without the exchanges, so ban or not the Chinese government is trying to act fast to provide licenses and some kind of regulations to at least have a control of the crypto market in its space in china.
The best prediction and argument of why all these is happening that I will accept and I am betting my money on is that , china is making a Tether CNY , this makes a lot of sense if you follow the Chinese governments agenda thoroughly. There are speculations that the exchanges if they are allowed to operate will stop CNY- BTC trades , or digital asset trading with fiat and encourage cryto trades that’s BTC-ETH between themselves , so if china makes a Tether say CNYT it can be traded as a cryptocurrency representative of CNY controlled by the Peoples Bank of China, now this makes a whole lot of sense in that way there is better management of the space in china and better control on CNY by the Chinese government which is the whole purpose of all the ban and restrictions in the first place.
So I conclude that , this is a good endeavor by the Chinese government , for taking the initiative to be the first to understand how to 'take control' of the crypto space to some extent and leverage on its potential as a fungible and resilient asset which is here to stay forever. The Last FUD by the Chinese government took only 3 days till the market to resettled and the bull run began, because of the series of bad news every week and the Chinese govt. not clarifying there stance now until that happens the market will be bearish.