The Chinese government’s controversial and unprecedented ban on the trading of cryptocurrencies has been highly effective according to the country’s central bank.
According to a report by the country’s state-run news agency Xinhua, the People’s Bank of China (PBoC) has concluded that Bitcoin trading in China’s fiat currency, the renminbi (RMB), has dropped below 1% of global trading volume. The government’s crypto ban has been incredibly impactful to the markets since it was instituted. According to the PBoC’s report, over 90% of the world’s Bitcoin trading volume stemmed from China prior to the country’s ban.
Since September of 2017, China’s central bank has shut down a total of 88 cryptocurrency exchanges and 85 initial coin offerings.
Zhang Yifeng, a blockchain analyst at a Chinese credit card company, discussed the report, saying, “The timely moves by regulators have effectively fended off the impact of sharp ups and downs in virtual currency prices and led the global regulatory trend.”
The Chinese government’s crackdown on cryptocurrencies likely stems from the country’s fear of allowing its citizens the ability to bypass the banking system. Nevertheless, the country has been heavily involved in supporting blockchain projects. It is also likely that the country leads the world in crypto mining and that the PBoC may soon issue its own digital currency. Officials in the government and the central bank have also said that they would follow and support any type of global regulatory framework if ever created.
At this time, it is unlikely that China will lift its cryptocurrency ban anytime soon. China has blocked a total of 110 international websites, including Binance and Huobi, in an effort to stop its citizens from accessing internationally based exchanges. The country has also been cracking down on peer-to-peer trading services that allow Chinese citizens to buy and sell cryptos without going through any official channels.