In a recent announcement, the People’s Bank of China issued a blanket ban on cryptocurrency activity like trading and mining in the country. The announcement sent the global crypto market into a tizzy.
The market had already suffered a major setback in April-May 2021 due to tightening regulations from China. China continues to intensify its ban and is imposing stricter policies for curbing the growing crypto market to safeguard its digital assets.
Millions of dollars were wiped off the market in a single day post the announcement as clients clamored for liquidation of their investments.
PBOC wreaks havoc across crypto market with recent ban on all crypto payments in China.
Today #NFT global volume decreased to 192 800 103,14 US$ and with recent China bans there is high probability of continuous downtrend. pic.twitter.com/Rdh6hKER2d
— CryptoMarketNFT (@CryptoMarketNFT) September 24, 2021
It has been reported that stringent regulations are being put in place as China is trying to develop its first-ever official digital currency.
Over a chat with CISO MAG, R “Ray” Wang, Founder, Chairman, & Principal Analyst of Constellation Research said, “The People’s Bank of China (PBOC) ban is really a reinforcement of an existing law from 4 years ago. China took the time to study the market in order to build their digital yuan and destabilize the dollar. Now they know they can build their own country backed crypto (CBC). They no longer need other cryptos and do not want money to flow out of the country. They want to run their own belt and road metaverse economy.”
In a blog analysis Wang explained how the Metaverse Economy will grow with or without CCP China. He added, “China’s ban only delays the inevitable. The DeFi movement and cryptocurrencies demonstrate how and why individuals will conduct business outside of central banks. Moreover, the Metaverse economy is powered by cryptos. As adoption grows, a ban by China will eventually lead to digital isolation as citizens find workarounds for more efficient approaches.”
This is only the latest strongarm signal over crypto as China ramps up its efforts to launch a central bank digital currency.
— CoinDesk (@CoinDesk) September 24, 2021
China has been issuing warnings against the usage of cryptocurrency since 2013 and had also announced a new cryptography law, effective January 1, 2020, designed to assist the development of the cryptography business and enhancing the security of cryptocurrency. This has resulted in Bitcoin miners fleeing China and large number of Investors opting for decentralized exchanges.
Nischal Shetty, Founder and CEO at WazirX + Crowdfire, said, “The global markets reacted with caution leading to a drop in Bitcoin and other crypto prices. However, the markets recovered quickly, and prices seem to have stabilized. Overall, this does impact the number of participants in crypto as China has a huge crypto population. It will be interesting to see how this ban plays out as crypto is a decentralized technology making the ban hard to implement. “
How effective this ban will be, is yet to be ascertained as globally the regulators are working on a positive note to make the crypto market mainstream.
The 🇨🇳 Chinese ban on trading #crypto had a negligible impact as the overall market cap recovers.
Decentralized Exchanges could become alternatives for Chinese traders. 👀 pic.twitter.com/arPItR4Wr1
— Delta Investment Tracker (@get_delta) September 27, 2021