According to the South China Morning Post, the Chinese government will ban trade in cryptocurrencies. It will tighten and completely ban trade at domestic and foreign cryptocurrency trade fairs.
Last year, the government had already announced a ban on direct action from cryptos to Yuan (CNY). It is therefore now sharpening this prohibition by prohibiting all ICPs' commercial activities in cryptocurrencies. It pretends to protect the citizen.
The People Bank of China (PBOC) stated Monday afternoon that it will tighten the rules. Persons who promote cryptocurrency trading activities will be convicted. The Chinese bank still finds all crypto-related activities too dangerous for the citizens. Two weeks ago, the bank had already summoned financial institutions to no longer provide cryptocurrency-related activities with new money. China, in turn, subsidizes blockchain innovation and spends millions on subsidies to promote the development of blockchain technology.
Cryptocurrency market
Since China represents the largest part of the cryptocurrency, this will most likely have a negative effect on the market cap.
In a market that has already lost more than half of the value, this is another blow in the face of cryptocurrencies.
This is positive for countries such as Japan, Singapore and South Korea. The trade volume is likely to rise in those countries. Because traders have to go somewhere, according to Ace Yang, executive director of Cathay Capital, a private institution in Beijing. Thanks to VPN technology, many Chinese traders will still remain active to circumvent the "great firewall of China".