Very few countries have a complicated relationship with blockchain and cryptocurrency as China. First, the country implemented a ban on cryptocurrency and this led many to think the country would have a permanently anti-blockchain and crypto stance. However, the country has since announced the development of its own national digital token and their president has openly called for more blockchain innovation across the country and this has led some to once again believe that the country is changing its attitude towards blockchain and cryptocurrency.
In yet another change of narrative, regulators in China have ordered Beijing authorities to carry out more activities to prevent the resurgence of cryptocurrency use by the general public in China.
This new information comes via an announcement on the China Securities Regulatory Commission (CSRC) website from December 27, 2019. According to the announcements, a resurgence in cryptocurrency use will lead to increased crypto trading, an increase in zero-interest loans as well as violations of provisions by the Peoples Bank of China.
With all this in mind, the regulators have called on Beijing authorities to combat any crypto-related activities that have been deemed illegal. The announcements also reiterated that the government has put a ban in place on cryptocurrency and individuals as well as entities are not allowed to trade in cryptocurrency or engage outside parties to trade on their behalf. It should be noted that many Chinese crypto users have started using virtual private networks in order to trade securely in cryptocurrency.
Earlier this year, the Peoples Bank of China stated that they will continue to crack down on cryptocurrency use and stated once again that such activities are still illegal in China. After the Chinese president called for an increase in blockchain innovation, there was speculation that China would soften their attitude towards cryptocurrency as well. However, this was quickly cleared up as several prominent publications stated that support of blockchain does not mean support for cryptocurrency.
“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies,” said The People’s Daily, which is under the ruling party in China.