China’s cryptocurrency ban wasn’t something to take lightly. Supposedly a move that would bring crypto trading a halt, it angered millions that had strong links to the cryptocurrency market. The ban officially stopped cryptocurrency trading and ICOs, but it hasn’t exactly eradicated crypto activity on Chinese shores as intended. Showcasing serious resilience, crypto activity has actually gone in the other direction, as local developers continue to push forward with new, worldwide influencing Blockchain projects.
Battling against the “Great Firewall”
Before looking at how China has moved forward with its blockchain efforts, you need to look at the ban and what it meant for the nation. It’s fair to say that since its explosion in popularity, cryptocurrency fever has swept through the Far East. With its growth concerning the Chinese officials, moves were made to crackdown on cryptocurrency trading by the People’s Bank of China (PBoC) and the local government. Through what has been nicknamed the “Great Firewall”, cryptocurrency and Bitcoin websites were blocked, cutting citizens off from everything crypto related. The move was considered highly controversial, especially when you consider that the use of VPNs is also illegal in China. However, this hasn’t stopped crypto trading from occurring. PBoC’s independent news publication said, “Overseas transactions and regulatory evasion have resumed. Risks are still there, fueled by illegal issuance, and even fraud and pyramid selling.”
Still trading, still active, still thriving
The official statement from the PBoC certainly had fear as its core message, but it hasn’t done much to squash the calls for cryptos in China. Trading has remained active via Chinese crypto exchanges like Huobi and OKEX. Hitting $1 billion per day on average since the start of the year, it’s safe to say that after the ban these exchanges are thriving. Both OKEX and Huobi moved quickly in the face of the ban, relocating to Hong Kong. This meant that they could serve both Chinese traders and international investors effortlessly, which allowed them to experience a boom in trading demand and volume.
Through the relocation, the likes of Huobi, OKEX, and TideBit have kicked open the door for Chinese cryptocurrency investors to access the global market. Terence Tsang (TideBit COO) delivered a damning verdict on the ban as a result, “The ban did not stop Chinese investors from buying cryptocurrencies. In the last few weeks, we have seen a lot of mainland customers opening up accounts at TideBit. They still want to play the game. I see a growing need in that they will come to Hong Kong or Singapore to buy cryptocurrency.”
Proceed with caution
It’s amazing to see crypto activity blossom in Hong Kong with huge numbers of Chinese investors making the jump, but there is still plenty of caution in the air. Many Blockchain projects, investors, entrepreneurs, and analysts have maintained a low-profile at events, meetups, and conference. This proves that – while crypto trading is still taking place – many believe that the Chinese government’s unpredictability presents an on-going problem. Leongard Weese (Founder of Bitcoin Association of Hong Kong) said, “People in China will be more careful about marketing these events, and a lot of that marketing activity will come to Hong Kong in the form of conferences and communities.”
Countless traders are circumventing laws and legislation to actively invest in cryptocurrency, but the Chinese government is still pressing ahead with further crackdown measures regardless. Following the turn of the year it went to extremes, requesting that banks investigate accounts of suspected cryptocurrency traders and ensure that related bank accounts aren’t being used for trading purposes. The PBoC issued a statement confirming that these measures were taking place, “Every bank and branch must carry out self-inspection and rectification, starting from today. Service for cryptocurrency trading is strictly prohibited. Effective measures should be adopted to prevent payment channels from being used for cryptocurrency settlement.”
NEO stands firm
You can’t look at the cryptocurrency market in China without addressing NEO. Recognized by most as China’s own version of Ethereum, it actually boomed off the back of China’s crypto ban. Dramatic price jumps saw it reach a $10.5 billion market cap during January 2018. This makes it the sixth largest cryptocurrency in the world. China’s crypto ban is proving to be invasive even if it’s hardly been impactful, so it’s a real positive that NEO has been able to improve its market presence in spite of this. However, in February criticisms were made regarding NEO’s consensus algorithm by two leading crypto-community experts in Emin Gün Sirer and Eric Wall. It’s not a major issue at this point, but it could potentially represent a dent in NEO’s armor as time moves on.
Crypto activity comes alive in China!
The Chinese government is doing everything it can to stop cryptocurrency trading and Blockchain-related projects. But, this hasn’t dampened the spirits of crypto traders and Bitcoin backers judging by recent statistics. If anything, the demand for crypto projects is growing as a result of the ban, with the local market answering the call. From small-time firms to large-scale conglomerates, the interest in development and commercialization of cryptocurrencies isn’t going anywhere. Overall, China is going to extremes to crush crypto trading, but as the above has explained crypto activity is anything but dead in the Land of the Red Dragon!