Yin Youping, deputy director of the Financial Consumer Rights Protection Bureau, recently said that digital assets such as Bitcoin have no legal validity and have no real value.
The Chinese government insists on not changing its stance against Bitcoin and other cryptocurrencies. The Chinese government, which constantly imposes bans on cryptocurrencies, does not want companies engaged in cryptocurrency mining to work in their own country, causing companies to migrate to other countries.
However, Yin Youping added that cryptocurrencies are a pyramid scheme and warned people to stay away from Bitcoin and cryptocurrencies. With the popularity of cryptocurrencies, the People's Bank of China has begun to increase its pressure on cryptocurrency trading.
In addition, the Central Bank has done a lot of work to prevent and restrict fundraising with cryptocurrencies, in collaboration with the China Banking and Insurance Regulatory Commission.
The People's Bank of China plans to establish a working mechanism to deal with cryptocurrencies. It also encourages people to report crimes related to cryptocurrencies.
Why Is China Imposing Tough Bans Against Cryptocurrencies?
China has been wanting to ban every transaction related to cryptocurrencies in its own country for about 3 months. What has happened now that everything is turned upside down in China, where Bitcoin mining once took place about 45%? There is no clear explanation for this. In general, it is mentioned that cryptocurrencies are speculation or are involved in events such as money laundering.
Let's say money laundering is about cryptocurrencies. Do you think this solution is forbidden? Every system has its own vulnerabilities. Blockchain technology may be one of the least vulnerable technologies.
Another reason might be the way China is governed. The People's Republic of China has a socialist state system based on a single communist party regime. Blockchain and cryptocurrencies, on the other hand, are a technology where the concepts of decentralization come to the fore and people can feel more free. Maybe it is taking such tough decisions because it goes against the way and perception of China's government.
If we briefly touch on bitcoin mining in China;
It has been seen that the People's Republic of China is actually responsible for 50% of Bitcoin mining.
Alaists held "secret talks" with miners, who agreed to provide certain information, such as power costs, on the condition that they remain anonymous.
BitOoda has also discovered that 14% of the mining industry is in the US. However, it seems difficult to confirm the estimates in China, and as many as 50% are open to interpretation.
I say China only takes this stance because let's face it, while it is not ENTIRELY a socialist country, at heart it is still a socialist country. And the ONLY way that socialism works is if the government can have a hold over its people.
And holding people back from making their own money and prospering is certainly a way to do that.
China's economy is such that it wants to dangle enough of a carrot in front of its people to keep them going, but not enough that they can grow their own carrots.
And so crypto scares them. It gives its people more access to the outside world and access to outside wealth that the government cannot provide and cannot control. It does not want that. It wants to maintain its hold over the people.
And so, as crypto makes it easier for people to go at it on their own more than ever, of course China wants to shut that down. It threatens their hold. It threatens their control. It threatens their power over the people.
Nothing scares a socialist more than a citizen who is not dependent on the government.