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It appears the Chinese government has big plans for cracking down on Bitcoin. This is not good news for local cryptocurrency enthusiasts, though. A broader clampdown on this cryptocurrency will have some interesting consequences. All other channels for buying or selling Bitcoin will be targeted next. Although there is no official confirmation yet, it appears P2P and OTC trading may be targeted next.
No one will be surprised to learn Chinese regulators have no love lost for Bitcoin. After their “ban” on exchanges, it seems a broader clampdown may be on the horizon moving forward. Sources close to the matter mention how one-on-one trading service will be scrutinized moving forward. More specifically, this does not bode well for P2p and OTC trading solutions whatsoever. It is still unclear how this crackdown will be enforced, though. We will need to wait for an official explanation by regulators to see what the future holds.
Chinese Bitcoin Clampdown has Opposite Effect
These measures feel a bit draconian in nature. For a country focused on a digital economy, denouncing Bitcoin is a very unusual decision. It is evident regulators are concerned about the global reach Bitcoin has right now. Given the economic instability in China, cryptocurrency may be the proverbial drop in the bucket. It is highly unlikely China will grant legal status to Bitcoin moving forward. Instead, the opposite seems the more likely outcome, by banning cryptocurrency trading altogether.
With this growing lack of clarity from regulators, speculation is running wild. No one knows for sure what the next step is regarding this broader clampdown. Rumors are surfacing regarding blocking access to foreign Bitcoin exchanges, among other things. Even if this is true, there is no reason for the Bitcoin price to drop in value whatsoever. In fact, this will only make Bitcoin a stronger currency than it was before. Without Chinese regulators breathing down Bitcoin’s neck, the ecosystem can finally realize its full potential.
The only logical outcome is how China will miss out on an emerging market again. Their actions are clear signs of desperation to keep the Yuan relevant for an extended period of time. For now, there is no indicating any changes will be made to the Bitcoin mining industry. If that were to be the case, there would be a legitimate reason for concern. Right now, that is not on the horizon, though. It will be interesting to see what the future brings for Bitcoin in China.
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