Chinese cryptocurrency market: how it was before and what it is now
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In order to understand the principles of the functioning of cryptocurrency and to create effective strategies for earning money on the crypto market, it is necessary to deeply study the history of the emergence of cryptocurrency as such. This will not only help you better understand the market, but will also teach you how to anticipate events in the crypto market.
In this article, we are going to look at the history of the Chinese crypto market. You will learn about how and when the first cryptocurrency appeared in China and what is happening to the cryptocurrency market today.
History of Сhina crypto market
Such a cryptocurrency as Bitcoin, as you may have heard, appeared in 2009. Over time, it gradually began to gain popularity and eventually became one of the most expensive in the world.
The popularity of bitcoin has not bypassed the Asian crypto market. It was in China that they reacted with interest to the phenomenon of cryptocurrency. Two years after the advent of Bitcoin, the first ever cryptocurrency exchange was created, and two years later, large IT corporations began to use cryptocurrency as a means of payment.
China was one of the first countries in which active cryptocurrency mining began. The production of special equipment for mining coins began to develop here. Also, it was in China that large mining pools began to form. Such an active growth in the popularity and development of cryptocurrency mining in the country inevitably interested government structures. The country’s leadership expressed concern about the existence of the cryptocurrency market in China. This was due to the fact that the government feared that the cryptocurrency could eventually completely replace fiat, i.e. government currency.
Actions of the Chinese government regarding cryptocurrency market
Unfortunately, the policy of the Chinese government regarding cryptocurrency mining turned out to be quite harsh. In the first half of 2021, a cryptocurrency mining cap was announced, which led to a reduction in its production by more than 55 percent worldwide. As a result of government restrictions, in the summer of 2021, a complete ban on cryptocurrency mining was introduced.
The largest cryptocurrency exchanges and communities have been forced to close or cease activities in this area (for example, Bishijie, BCTChina, Huobi Global). The Chinese government decided to take such measures also because they considered the cryptocurrency market as a way to illegally withdraw public money.
The situation with the cryptocurrency market in China today
Despite the fact that there is no initial placement of cryptocurrency in China today, there are still opportunities to work with digital currency.
Today, the government actively supports the development of a digital currency that is officially recognized by the government. At the moment, it is planned to implement the largest financial reform, which will make it possible to actively develop the state digital currency.
The state aims to issue such a state digital coin that will be stable and can be successfully used in the People’s Bank of China. This coin will be called the Digital Chinese Yuan.
What happens when chinese crypto markets close
After the closure of the Chinese cryptocurrency market, the government of the country will try to create a digital currency that would satisfy the population’s need for digital money. The essence of this need lies in the need for anonymity while providing control over large transactions. This will allow the state to control possible cases of money laundering and financing of terrorist organizations that undermine the interests of the state. At the same time, the anonymity of the holder of the allowed cryptocurrency when making small transactions will be ensured.
Of course, without such demand, the alignment led to the fact that Bitcoin fell, but it is necessary to cultivate optimism. After all, over time the situation may change, there will be more practical rules for presenting views both for users and for the general public.