China might really be out of Bitcoin and the cryptospace

[bbc.reporter]

Yes this time it might be different. I argued before that the crackdown might only be temporary because it was only for posturing for China’s July 1 celebration of the 100 year anniversary of the Chinese Communist party. I also based my argument by reading between the lines from articles written by journalists who might not deeply know what is happening in China.

This article shows what has changed behind the financial regulatory structure in China and why the crackdowns and the bannings might not be temporary.

Also, if they are temporary, will the miners and exchanges, otc trading desks go back and risk for another crackdown again? The environment in China is very discouraging for the cryptospace.



Prior to 2018, China’s financial regulatory system was constructed as a “one bank, three commissions” hierarchy, with the People’s Bank of China (PBOC) functioning as the central bank, the China Banking Regulatory Commission (CBRC), China Insurance Regulatory Commission (CIRC) and the China Securities Regulatory Commission as the three commissions. (Later on in 2018, in response to increasing risk-taking behavior from insurance companies, the CRBC and CIRC were combined into one entity, but that is beyond the scope of this article).

In 2017, an additional regulatory body was established by the name of Financial Stability and Development Committee (FSDC). The difference between FSDC and previous regulatory committees is its seniority – FSDC is directly under the State Council, the chief administrative authority of China, essentially overlooking the other committees aforementioned.

Tasked with the important task of supervising monetary policy, financial regulation and above all, preventing systemic financial risk, the FSDC is helmed by the Vice Premier of China, Liu He, who is notably more highly ranked than the heads of the other regulatory commissions and PBOC. There is no direct parallel in the US, as the SEC, CFTC, FinCEN, and the Federal Reserve are only granted legislative and regulatory power over their respective verticals.

While the May 21st notice itself lacked details regarding how enforcement would look like, it differs from previous similar calls for regulation in that it was signed off personally by Vice Premier Liu. This signalled that a crackdown was likely a high priority for China.

Read in full https://insights.deribit.com/market-research/china-fud-understanding-chinas-recent-crypto-regulations/

[mk4]

Not a surprise in the slightest. The environment in China is very discouraging when talking about freedom in general, not only concerning Bitcoin and cryptocurrencies. If they people aren't even allowed to access common websites such as Facebook and Twitter due to their "Great Firewall", what makes us think that they'd allow their people to have access to a protocol that promotes freedom?

[WTFTX]

Not a surprise in the slightest. The environment in China is very discouraging when talking about freedom in general, not only concerning Bitcoin and cryptocurrencies. If they people aren't even allowed to access common websites such as Facebook and Twitter due to their "Great Firewall", what makes us think that they'd allow their people to have access to a protocol that promotes freedom?

Pretty much this, it was no surprise that China wanted nothing to do with it considering they're an authoritarian regime. Many of the neighboring countries will be welcoming the miners in with open arms.

[Imran232]

If this things happen then it won't be surprising or shocking. Because we already known about that China is a country where people has no freedom to use any service Against government. And public are so afraid to use any Because Govt. has a Strong cyber military who are working to track their public activists. So if they use bitcoin or irregulated things then government will know and punished them which is ridiculous. But though government thought to launch their own crypto so that they can regulated thats why they might be temporary doing this thing with others crypto. Its mine thought others can be different. Thank you.

[amishmanish]

That article is a whole lot of unnecessary research. China is not a country. It is a fiefdom run by the one party, CCP. The Chinese people had started to hope against hope that the CCP will continue to let them do "crypto". If you go to any of the recent projects, you'll see a Chinese community in there. This meant that the people liked crypto. Now the idea behind people forming communities and governance mechanisms online is something that the CCP naturally views as a corruption. The basic philosophy is one of decentralization and democracy.

The party controls what the Chinese think. It has worked hard over the years to mould them into workers and consumers suitable for the job assigned and to provide an internal market for growth. Suddenly, these people are having ideas about "governance" and "decentralization". To a party that keeps an eye on everything that the people there discuss and access on the internet, this is a dangerous idea. One that can easily "poison" the minds of their population they have worked so hard to zombify.

The shifting of miners will be a short term pain and I think, overall, bitcoin is better off getting rid of the CCP.

[mindrust]

So what? Nobody would lose anything if China chickens out. The miners will move to the next cheapest country, people will still keep using crypto. Maybe the prices will go lower but in the long run it will be recover from that just like it recovered from anything else before.

I still think China can't afford to kill the crypto business because they make so much money from it.

[cabron]

The situation in China is actually democratic and freer than what was before, it doesn't look very communist at all. If you notice some of the news journals today somehow are criticizing their government. They however know how to play the game now, they know they have more control now including the media in the west. The crackdown will be temporary. They probably move the miners to Texas which the land is also owned by the Chinese.

The Chinese government knew BTC is also a threat to their CDBC so they could design an attack on BTC. The government probably have bought BTC from the miners a long time ago or probably even own an exchange itself. I could be wrong though.

[virasog]

Not a surprise in the slightest. The environment in China is very discouraging when talking about freedom in general, not only concerning Bitcoin and cryptocurrencies. If they people aren't even allowed to access common websites such as Facebook and Twitter due to their "Great Firewall", what makes us think that they'd allow their people to have access to a protocol that promotes freedom?

If this was the case, why they were allowed to built the world biggest bitcoin mining farms in the first place ?
China always want to dominate the world and therefore they will not quit crypto currencies. I think recent news about china banning mining and crypto is a part of their plan which no one considers at the moment.

[mk4]

If this was the case, why they were allowed to built the world biggest bitcoin mining farms in the first place ?
China always want to dominate the world and therefore they will not quit crypto currencies. I think recent news about china banning mining and crypto is a part of their plan which no one considers at the moment.

What are you talking about? They just did kick out all of the miners out of their country, and they already banned most of the major "DeFi" websites.

[bbc.reporter]

That article is a whole lot of unnecessary research. China is not a country. It is a fiefdom run by the one party, CCP. The Chinese people had started to hope against hope that the CCP will continue to let them do "crypto". If you go to any of the recent projects, you'll see a Chinese community in there. This meant that the people liked crypto. Now the idea behind people forming communities and governance mechanisms online is something that the CCP naturally views as a corruption. The basic philosophy is one of decentralization and democracy.

The party controls what the Chinese think. It has worked hard over the years to mould them into workers and consumers suitable for the job assigned and to provide an internal market for growth. Suddenly, these people are having ideas about "governance" and "decentralization". To a party that keeps an eye on everything that the people there discuss and access on the internet, this is a dangerous idea. One that can easily "poison" the minds of their population they have worked so hard to zombify.

The shifting of miners will be a short term pain and I think, overall, bitcoin is better off getting rid of the CCP.

The author of the article was only showing the differences between the regulatory crackdowns of 2014, 2017 and presently today. The big difference is the change in China’s financial regulatory structure as mentioned. Similar to many, I thought that China’s regulatory crackdown on the cryptospace might only be temporary. However, reading that article is making me think that we should not expect China to return anymore. We should be realists and stop hoping that the crackdowns are temporary. We should accept that China is out and the cryptospace should adapt. Bitcoin and cryptospace will be better without China. It might not help pump the price, however, it will be better. Also, they cannot stop their citizens from using a VPN and access an offshore exchange hehehe.

[virasog]

If this was the case, why they were allowed to built the world biggest bitcoin mining farms in the first place ?
China always want to dominate the world and therefore they will not quit crypto currencies. I think recent news about china banning mining and crypto is a part of their plan which no one considers at the moment.

What are you talking about? They just did kick out all of the miners out of their country, and they already banned most of the major "DeFi" websites.

Can't they allow miners at a later time and/or can't they allow these websites to resume in near future ?

Everyone knows that china spread out fuds and even china know what world is thinking, so they are taking this fud to the next level so that people believe in this fud.  

[Wexnident]

Not surprising. It is China being China, I highly doubt that even if it could improve their lifestyles by a ton, they still wouldn't allow it if the cost was allowing their citizens to access freedom. Not to mention that they'd even probably try to implement said improvement to their system in a way that it would be allowed, still allowing them to retain control, just like with their venture towards creating their own cryptocurrency. Well, they are still pro on developing blockchain, just that they have averse hate towards Bitcoin which symbolizes freedom across borders.

[Nunoluck]

I hope by this news bitcoin price can go down under 30K , I have been waiting for this. I want to buy bitcoin at 20K price level. Honestly I think if China completely leave bitcoin then it is a big problem for cryptocurrency market, many people will be afraid and then sell their bitcoin. In other side it is also create a new big opportunity to replace china domination in cryptocurrency investment. I think we are a big community now, we are the market.

[mk4]

Can't they allow miners at a later time and/or can't they allow these websites to resume in near future ?

Everyone knows that china spread out fuds and even china know what world is thinking, so they are taking this fud to the next level so that people believe in this fud.  

Theoretically, sure they can. Just like how theoretically they can allow people to use famous social network sites in the future. But the question is, will they? Most likely not. China is a communist country, and cryptocurrencies are freedom — which is completely opposite of what their goals are.

[Coyster]

In my opinion, I know it's difficult for the miners in terms of relocating, but it is what it is, and that's that China no longer want any of crypto in their country, I know this can have its own negative effects in the short period, but if the miners move on and start doing business again somewhere else, then they can start their recovery and in the long run forget about China and their dictatorial policies.

Having said that, I still think many of the Chinese decision regarding crypto could be as a result of their digital currency plans (digital Yuan), they are used to control, and will control their CBDC, and since they can't do same to Bitcoin and other dex crypto, it then makes sense for them to do away with it.

[Lucius]

I still think China can't afford to kill the crypto business because they make so much money from it.

I would be interested to know how much of their GDP comes from crypto mining and the production and sale of mining equipment, but it is quite obvious that this profit is not something that could harm their economy. In fact, China has a huge surplus of funds that it invests all over the world, as it was during the crisis that started in 2008, and I believe that it will be the same in the future.

In the long run, this is the best thing that could have happened for Bitcoin, because finally we will no longer have to listen to stories that China controls BTC through mining and that the electricity for this business comes from coal-fired power plants. If this time they finally cut all ties with BTC, we can say that we killed two flies with one blow.

[btc_angela]

Not a surprise in the slightest. The environment in China is very discouraging when talking about freedom in general, not only concerning Bitcoin and cryptocurrencies. If they people aren't even allowed to access common websites such as Facebook and Twitter due to their "Great Firewall", what makes us think that they'd allow their people to have access to a protocol that promotes freedom?

If this was the case, why they were allowed to built the world biggest bitcoin mining farms in the first place ?
China always want to dominate the world and therefore they will not quit crypto currencies. I think recent news about china banning mining and crypto is a part of their plan which no one considers at the moment.

It's because they didn't think that bitcoin will turn out this big, not really sure when the bitcoin mining started in China though, but I'm under the impression that it could be as early as 2011 when bitcoin can still be mined by GPU. And then they struck gold mine, producing high end machines so business is  booming. So now that bitcoin has grow tremendously, the Chinese government need to take control of their people, specially those who become rich and doesn't want a 'capital flight' scenario. Although it has been happening for years already.

[hd49728]

The author of the article was only showing the differences between the regulatory crackdowns of 2014, 2017 and presently today. The big difference is the change in China’s financial regulatory structure as mentioned. Similar to many, I thought that China’s regulatory crackdown on the cryptospace might only be temporary. However, reading that article is making me think that we should not expect China to return anymore. We should be realists and stop hoping that the crackdowns are temporary. We should accept that China is out and the cryptospace should adapt. Bitcoin and cryptospace will be better without China. It might not help pump the price, however, it will be better. Also, they cannot stop their citizens from using a VPN and access an offshore exchange hehehe.

Their government try to be a hub of a universe and this crackdown is temporary only. They will flip their regulation again. Even the regulation (mining crackdown) is permanent, it still be a good thing for Bitcoin network, long time.

The crackdown is enforced in limited areas in China, not nationwide.

The bitcoin and crypto space can not eliminate China as part of them but China power will decrease as same as their power in economy and politics will falls after the pandemic and their arrogant diplomacy.

[CaVO32]

Not a surprise in the slightest. The environment in China is very discouraging when talking about freedom in general, not only concerning Bitcoin and cryptocurrencies. If they people aren't even allowed to access common websites such as Facebook and Twitter due to their "Great Firewall", what makes us think that they'd allow their people to have access to a protocol that promotes freedom?

If this was the case, why they were allowed to built the world biggest bitcoin mining farms in the first place ?
China always want to dominate the world and therefore they will not quit crypto currencies. I think recent news about china banning mining and crypto is a part of their plan which no one considers at the moment.

It's because they didn't think that bitcoin will turn out this big, not really sure when the bitcoin mining started in China though, but I'm under the impression that it could be as early as 2011 when bitcoin can still be mined by GPU. And then they struck gold mine, producing high end machines so business is  booming. So now that bitcoin has grow tremendously, the Chinese government need to take control of their people, specially those who become rich and doesn't want a 'capital flight' scenario. Although it has been happening for years already.

I don't think this will be the endgame for bitcoin or crypto in China. They can always change their stance on this. When they find a way how to have more control on this industry, they will announce another statement. Because as some countries are moving forward with this technology, they are like totally evading this technology. But if someone knows the mentality of Chinese, they will always change their perspective if they know they can be of advantage of the situation. Let us see if next year, they will still have this approach to crypto.

[ILuckyGuyI]

I'm not sure about the "temporary" part. Because Chinese goverment is really unstable about cryptocurrencies or Bitcoin mining. Maybe it won't really accept any kind of mining activity from now on. But I don't think that China will maintain the ban on cryptocurrencies forever. It is for its disadvantage also. Once China realize it, I think it will change its mind.