China cannot refuse Bitcoin; however, new regulations will come between the country and the digital currency. Some of them better than what we could expect.
China New Regulations
“There is a growing belief that simply saying no to Bitcoin will not be the final solution to the problem of cryptocurrency” says Xiao Xin, from the Global Times. But really the fundamental approach being sought for China would be to adopt the new technology without putting the country’s financial system at stake.
This approach is indicative of the fact that Beijing is preparing to rethink the regulations on crypto to open up more to the market, as other powerful countries such as the United States, Japan and Korea have done.
The Central Bank of the Republic of China decided to ban Initial Coin Offerings (ICOs) in 2017, something that caused panic in the crypto market. However, these facts should not be considered as disruptive to the potential development of bitcoin and other cryptocurrencies, on the contrary, with this type of measures governments seek to protect the public against market manipulation and guarantee financial stability. That is something that governments have been doing for years with conventional financial products and instruments.
But banning initial coin offerings and exchanges at the same time calls into question Bitcoin’s own legitimacy as a currency. It is known that Bitcoin undermines the monopolies of the government and the entire banking system.
If a competing currency like Bitcoin threatens the political system of a nation as large as China, why not to stop the development of crypto as soon as possible? Stopping Bitcoin also means stopping innovation. And it is precisely innovation what China constantly needs if it wants to become the world’s leading power.
The digital currency revolution is what can help China achieve its goals. For this reason, Beijing’s government is reconsidering the ban on Bitcoin. And it is quite possible that the ban would be lifted in the future.
China has also been investing in Blockchain technology and developing an index about virtual currencies. The main intention behind that is to start to prepare the way for the next regulations, which may allow exchanges and other crypto-related companies to operate within the country’s borders.
At the moment, China is one of the most important countries in the world investing in distributed ledger technology. Something that can be seen with the number of patents that the country has registered.