China clamps down cryptocurrency
September 4, 2018 6:13 am,
Over the last few weeks, China has stepped up and started to look over the topics of domestic regulation of digital currency due to the continuous pressure.
While Beijing supports the Blockchain technology development, it is still trying to limit the speculation on virtual currency since the ICO. Blockchain technology supports a secure, stable and basically a permanent record of transactions between two parties eliminating the need for a third party such as a bank. Bitcoin is the first application of this technology and since then hundreds of cryptocurrencies have come up on the surface. The prices skyrocketed last year, leading to investors to bet on bitcoin, stating that could transform the world market and this led to China testing the technology.
China seems to be on top of the virtual market and is still dominant in the mining of Bitcoin. But there is now an increased scrutiny as their regulatory principles have become stricter and also has led to banning domestic bitcoin-yuan trading. BlockVC, one of the main office is investing in around 40 to 50 blockchain projects.
The Guangzhou Development district is a special economic zone in Southern China close to HongKong has banned all cryptocurrency. This development district has issued a notice to forbid cryptocurrency events in the district. The special economic zones were instilled in various districts of China to encourage and foster business with less restrictive laws.
The ban issued was stated to be a step towards moving maintaining stability and security of the financial system. This move has come right after the one by the government authority Beijing’s Chaoyang district which issued the same ban to shopping malls, hotels, restaurants, and official buildings.
Reason for the ban?
The main reason for the ban stated by the Development district is the same as Beijing. They want to stabilize the Chinese Yuan and make it a legal currency and increase its position in the market.
The government of Guangzhou province, where the city is located, has completely opposed the ban and the step taken by the government. The provincial government had published a notice ordering municipal and county level governments to speed up the rolling out policies to support blockchain start-ups and also help to accelerate adoption of the applications which help to develop a technology.
It is said that when one friend forces another person to join in the blockchain and this is how the market spreads all over the country. The cryptocurrency prices have remained relatively steady despite the flurry in the Chinese market.