Given that the ban wholly takes the issue of cryptocurrencies out of their jurisdiction, the Chinese government is considering adopting licensing programs similar to Japan’s. They will be adopting a ‘zero-tolerance’ policy towards crimes committed with bitcoin and will be instituting various infrastructures that will allow the government to oversee transactions and also view the identities of cryptocurrency users. Such news heavily implies that the ban is a temporary pause on the Chinese cryptocurrency market and it will resume in due time once said infrastructures are developed and implemented.
Saturday, October 7, 2017
China Reconsidering Ban on Cryptocurrencies
In light of the recent ban on China’s nationwide ban of cryptocurrency exchanges, the country is now reconsidering allowing such transactions with the added catch of requiring record-keeping, licensing, AML processes, and limits on large transactions. Directly after the ban, the price of bitcoin itself fell in the $3000 range. As a result, the trading that would have originally been done in China was directed to Japanese and South Korean markets instead. Within the same month of the ban, Japan was also in the process of authorizing eleven new cryptocurrency exchanges. The value of bitcoin has since stabilized and returned to above the $4000 line.
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I think a main danger of China reconsidering this ban is captured in the blog sentence" "The value of bitcoin has since stabilized and returned to above the $4000 line." It may have since stabilized recently but these cryptocurrencies are incredibly unstable over time. A cryptocurrency doesn't fit the function of money as a stable store of value. I agree with the argument in this Forbes value that talks about the wild swings of the well known Bitcoin cryptocurrency-
ReplyDeletehttps://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/jeffreydorfman/2017/05/17/bitcoin-is-an-asset-not-a-currency/&refURL=https://www.google.com/&referrer=https://www.google.com/
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