Things are evolving in China, as the Asian giant’s financial technology entrepreneurs keep trying new things with cryptocurrency. According to Forbes, this means that border-less digital assets are not backed by any country’s monetary authority.
Somebody in the government is not a fan of cryptocurrency at all
One of the best examples is of a businessman in Shanghai, who recently developed an open software system, in order to create an exchange for cryptocurrency trades. However, the government is carefully tracking such operations, taking actions against crypto operations.
These ups and downs are expected to go on for a while, as the country, whose economy totals more than $12 trillion, throttles destabilizing capital outflows with less than a year ago. Therefore, the fact that it’s currently looking forward to keeping the control it has doesn’t come as a surprise. Still, China also knows about the advantages allowing crypto to develop in a manageable way has.
“Without government’s control, cryptocurrency could become instruments for drug dealing, capital outflow, terrorists and other illegal activities,” said Felix Tang, analyst for Kapronasia in Shanghai.
“The Chinese government is not reluctant about the development of blockchain or cryptocurrency under one condition — if it is manageable,” he added.
Should China expect stricter rules?
It is well known that last year, Chinese authorities banned ICOs as fundraising tools, alongside specific types of cryptocurrency exchanges. Even more, back in January, they stopped peer-to-peer and over-the-counter trading networks, ending up with banning offshore exchanges of cryptocurrency in February.
It is believed that these regulations, as well as the ones to come, would allow the Chinese monetary authority – the People’s Bank of China – give investors a lot more security, but also add safeguards against “speculative investment products.”
Finally, let’s not forget that China is chasing stopping any renewal of the mass capital outflows. By moving assets offshore, they are protected from any legal detection or any volatility in the capital markets. Currently, policymakers in Beijing are fearing that capital fight can devalue the yuan currency, but also undermine economic stability.