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Is Bitcoin banned in China?

 


Is Bitcoin banned in the People's Republic of China?

The rulers in the People's Republic of China do not like Bitcoin. The ruling Communist Party declared all transactions involving Bitcoin and other cryptocurrencies illegal in September 2021. Not only Chinese, but also foreign stock exchanges are affected.


With this regulation, Bitcoin is essentially illegal. The Chinese central bank declared this for all Chinese citizens. All of a sudden, cryptocurrency trading was illegal for more than a billion people in China.



How has China viewed bitcoin in recent years?

For years, the ruling Communist Party in China has been extremely critical of cryptocurrency. The decentralized currency makes people worldwide more independent from the centrally controlled, established currency systems. China would rather introduce a central digital currency with the yen. With its own digital, central currency, the government can remain in control of the citizens. 


China currency bitcoin

Bitcoin ownership and trading restrictions have been high in China for years. Cryptocurrency payments were declared illegal even before the big ban. This meant that shops could not offer Bitcoin as a means of payment. But this was only a foretaste of the big mining ban.

What is the Bitcoin mining ban all about?

In spring 2021 there was a change in the legal situation in China, which had massive consequences for the crypto market. Bitcoin mining has been banned in most regions in the country. This had such great consequences because at that time the majority of the large Bitcoin mining farms in China were located in the Middle Kingdom.


Above all, the low energy costs ensured that miners settled in China. The ban on bitcoin mining came as a relative surprise. Thousands of mining farms had to close and the Bitcoin hash rate collapsed. As a result, there was a massive price correction for Bitcoin in April 2021. This price crash continued in the months that followed. Prices did not rise again until the third quarter.


What is the history of bitcoin in China?

Long before the bans, the demand for bitcoin was in no country as great as in China. The Chinese loved the new cryptocurrency . This has ensured that the government has repeatedly introduced new regulations in recent years to control Bitcoin in China. You can find a chronicle here .


Especially mining in China was an extremely lucrative business. Due to the low energy costs, an extremely large number of servers gathered in the Middle Kingdom to mine Bitcoin. Because of this, up to 70% of all large mining farms, a collection of Bitcoin mining servers, were located in China.


Crypto exchanges continued to develop in China. The world's largest crypto exchange, Binance, is originally based in China. However, due to increased regulations, it relocated its headquarters to Malta.

What is the future of BTC in China?

At the moment, the Chinese are banned from trading cryptocurrencies like bitcoin on crypto exchanges. Still, millions of Chinese secretly own bitcoins. But a relaxation of state control does not seem to be in place. The government is more likely to introduce more bans and push ahead with the introduction of its own central digital currency.

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