China's Crackdown on Cryptocurrencies : An Overview

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As Chinese authorities prepare to block domestic access to Chinese and off-shore cryptocurrency platforms, take a look at a series of events around it.

  • China banned Initial Coin Offerings (ICO) last year, the Initial Public Offering (IPO) equivalent of new cryptocurrencies.
  • It was followed by a call-out to local exchanges to stop trading cryptocurrencies
  • There were measures taken to curb bitcoin mining by disrupting power supply to the miners.
  • China is the world's biggest hub for bitcoin mining due to its inexpensive power supply and labor resources. Mining of bitcoins takes a great deal of energy consumption from its usage of high power computers.
  • The Chinese government is taking these measures to lower its risk in its volatile financial system. Digital currency trading is said to have the potential of taking money out of China, increasing outflows.
  • The People's Bank of China is performing trials for its own prototype cryptocurrency. This move is said to indicate that China isn't against cryptocurrency but is rather trying to seek control of the virtual currency market.
  • Online and mobile app platforms that offer services similar to exchanges are under the Chinese government's radar for a possible ban.
  • Big mining companies are moving out of China to countries like Russia and Canada to carry on its bitcoin mining activities.
  • Bitcoin has fallen as much as 25% today resulting from the events in past week revolving around South Korean and Chinese governments bringing-in reforms to regulate the cryptocurrency markets. There have been fears of a possible ban among investors in these two major markets.
  • Over-the-counter cryptocurrency trading is still possible in China.

Read more about: china, cryptocurrency
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