TOMMY SUTJIPTO WRITES – It is official, China has entered a war against the digital currency, Bitcoin. China’s ban on the worldwide crypto-currency is no longer considered a rumor or fake news, but rather an official statement issued by the country’s government and financial regulators.
China’s analysts and economists alike sound the alarm and warn that by buying into Bitcoin, China inevitably condemns itself to grave consequences. The effects are likely to be devastating and lasting; analysts are already forecasting, debating and devising rehabilitation plans for the country’s economy.
So why has China banned Bitcoin and how is it carrying this ban out?
Bitcoin is considered the most powerful and controversial form of currency. Bitcoin’s controversy lies in its fundamental behavior that allows the general public to be awarded with the power to make money. This means federal banks would become powerless and redundant because Bitcoin doesn’t have to be moved and stored. It’s no surprise then that Bitcoin has been rejected by China.
Also, Bitcoin is “completely unregulated and completely decentralized.” So, no institution in the world can control the Bitcoin network. While “the common people” may sigh with relief and rejoice at the fact that a bank has no control over their money whatsoever, governments such as China’s find it difficult to swallow such a scenarion. Bitcoin is also anti-bureaucratic by definition. Every Bitcoin address is anonymous, and it can be set up in a few seconds without any fees paid.
Basically, China is against bitcoin because of its fear of losing power and control over its people.
Beijing has banned all existing forms of Initial Coin Offerings (ICO) and declared this activity as unauthorized fundraising, which is a criminal offense in China. Beijing also made the three largest crypto-currency exchanges in China by issuing a statement on the complete shutdown of all trade between Bitcoin and the Yuan. Such an ambitious act is evidence of the government’s centralized effort to show who is in control.
The People’s Bank of China and seven other government agencies issued a decree that makes all crypto-currency illegal. Legal analysts have also claimed that ignoring this new ban could result in a death sentence for ICO traders. The National Internet Finance Association makes a statement that declares Bitcoin a tool for criminal activities of money laundering, drug deals, smuggling and illegal fundraising.
The ban would prove effective for the Chinese government in the short-run as Beijing loves having power and control over its people. By banning crypto-currency, the Chinese government wasted the huge economic potential of BitCoin and instead the Chinese government fears change of any sort. Furthermore, the Chinese government discouraged trading crypto-currency by educating them that it is not ‘real’ money and it has a lot of concerns over security and safety. However, in the long run, the ban would hurt China and its people because crypto-currency, in my opinion, is the future of trading. It should be seen as an opportunity not a threat.
Today, the Chinese government continues to wage war against the virtual currency with the employment of the methods that reinforce its power and control.