China has recently scaled back on their cryptocurrency mining and are actually taking their servers offshore. This is because the government has declared cryptocurrency transactions to be illegal. That means that citizens are banned from working for crypto-currency companies. Most have either found different work elsewhere or have moved to other countries to continue their work.
So what does that mean for the rest of the world? Is every other country going to follow in this suit and start banning the use of cryptocurrency within their borders as well?
One Of The Biggest Action Against Cryptocurrency To Date
China definitely went all out in their case against crypto. The People’s Bank of China declared that cryptocurrency doesn’t have the status of other monetary instruments. Any transactions using it, even those originating outside of China, will be treated as crimes.
This decision was made on the basis that cryptocurrencies have disrupted the country’s financial systems and have contributed to certain crimes like money laundering. If you’re recently used crypto, then you might want to contact lawalways to see how they can help you.
Where Are Crypto-Miners Heading?
Almost everyone that once worked in crypto has now moved to Singapore, leaving the country empty of any servers. Even international companies are trying their best to cut any ties with China when it comes to business deals. However, this departure has made it easier for crypto-farmers overseas to mine, increasing their chances to add more to their Internet wallets.
Some people speculate that there might be a resurgence of cryptocurrency in China in the future, but no one is holding out hope at the moment. They would have to find some way to minimize the price volatility and overnight riches that can occur with things like Bitcoin.
The Current State Of The World With Cryptocurrency
Although there are no other countries that really deem Bitcoin to be illegal, there are limitations on how it can be used within a country’s borders. For example, most banks don’t allow cryptocurrency transactions to be made; other countries place heavy penalties when such transactions are made. In July 2020, Russia passed new laws that deemed cryptocurrency as being subject to taxation.
Why Bitcoin Considers This Ban Good News
Although the ban made the price of Bitcoin drop by about 6%, China was at the top of the farming scheme. Without them, then the United States has the opportunity to take that spot. It also opens up the options for there to be a central bank digital currency, which would increase crypto farming even more.
Even with the ban, cryptocurrency is only considered a relatively small asset class by private investors. But there is the chance that it could become a greater force in the global financial system, gaining more power over time until it’s taken more seriously. By banning cryptocurrency outright, China has essentially isolated themselves from what could be the future of the monetary system.