China was one of the most important countries regarding cryptocurrencies as its citizens represented more than 60% of all Bitcoin issued daily. As of September 24th, 2021, all cryptocurrencies transactions are illegal in China. The aim is to control financial risks.
After China’s Central Bank announced the news, the Bitcoin went off 7%. Now all the crypto investors are apprehensive about what will happen with Bitcoin during the following days.
The unique legal crypto in China is the electronic Chinese yuan. From now on, investors must buy this crypto if they want to continue investing in digital currencies in China. Some experienced economists say that China retired all crypto to obtain more investment from crypto traders nationally.
To guarantee the compliance of this new regulation, the Bank of China, in cooperation with other authorities, would take extensive actions, including the closure of payment channels, the withdrawal of relevant websites and mobile apps online
China is not the first country that has decided to make cryptocurrencies illegal. The following countries have either announced it as unlawful or restricted it:
- North Macedonia
Nevertheless, crypto users always find a way to continue investing. A trendy way is masking their location through a VPN. The governments continue to struggle with it.
"There's a degree of panic in the air," declared Joseph Edwards, head of research at cryptocurrency broker Enigma Securities in London. "Crypto continues to exist in a gray area of legality across the board in China."
Now El Salvador, which recently adopted Bitcoin as legal tender aiming to increase jobs opportunities to their population, may be worried about their citizens’ and companies’ digital assets because they obliged all businesses to accept Bitcoin. However, some tech and human rights lawyers believe Bitcoin has a lot of potential in El Salvador.
However, other attorneys say that If we consider the impact the Chinese economy represents globally, this decision can undoubtedly be a large brake on the future currencies.
- The Wall Street Journal (Chinese)