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China has attempted to do this many times over the last few years with varying degrees of success and this crackdown this year was something that was quite expected as it had asked the bitcoin miners in China to wind up their operations at the beginning of the year. The fact that they were asked to shut shop and the crackdown that followed, to ensure that the miners did indeed shut down, showed that China was coming for the crypto industry sooner than later. In recent months, it has been making sweeping changes across all social and economic activities and the crypto industry has been one of the industries that regulators around the world have looked down upon over the last few years.
In today’s order, the PBOC said that all services that offer trading, order matching, token issuance, and derivatives of virtual currencies are strictly prohibited and even foreign crypto exchanges are no longer allowed to offer their services within China. The bank has also added that it has improved its monitoring infrastructure to track all such transactions and has also said that employees of such crypto exchanges would be investigated. This news has come amidst reports that China is working on its version of digital currency. The prices of Bitcoin and other major cryptos like Ethereum sank on the news of this crackdown.
The regulators in different countries have been adopting different approaches to cryptocurrencies. While regulators like the SEC in the USA have adopted a very stern stance against cryptos and have been viewing crypto exchanges and crypto-related products with suspicion, there are other countries where the regulators have adopted a much softer stance. The most worrying aspect as far as the regulators are concerned is the effect that these cryptos would have on the overall economy as there are no ways to control or track the movement of the funds through cryptos.
Strict regulations and tracking of cryptos need to be set up to ensure that the cryptos are not used to fund illegal activities but these are things that require a lot of time and effort and even after all the effort, it may not be possible to regulate all aspects of crypto. This has forced regulators around the world to adopt a generally tough stance against cryptocurrencies.
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