In many countries, the uptake of cryptocurrency and the Blockchain has been fast and extremely popular. Around the world, the increase in crypto adoption between 2012 and 2021 was considerable, sending the price of Bitcoin up by 540,000% in this time period. However, the same has not been true in communist countries, such as Russia […]
What is a CBDC? A CBDC is a form of digital currency issued and backed by a central bank. CBDCs are typically a country’s traditional money in digital form – for example, China’s digital renminbi. CBDCs are distinct from cryptocurrencies, which rely on the application of cryptography to manage supply and security. A CBDC is […]
Despite the well-publicized ban on all crypto activities in China which drove its bitcoin mining totals to zero – evidence shows that the country hosts 21% of the total global Bitcoin hash rate, raising it back to a top-five (2nd) Bitcoin mining location. China was once the world’s largest Bitcoin mining country, with the local BTC hash rate power accounting for more than 75% in 2019. The hash rate then plummeted to 0% in July and August 2021, following a series of crypto mining farm shutdowns in the country. The authorities must be turning a blind eye to mining whilst clamping down on the use of crypto by the population – until, of course, its own digital renminbi is more fully adopted by its people.
China went from being the world’s largest Bitcoin miner to finishing out the Coincub ranking list following its major ban on trading, spending, owning or even mining cryptocurrency. Blockchain and advanced fintech development is where the country sees its future – and where China is, unsurprisingly, is well advanced – but ceding control of the money supply to its people via decentralized cryptocurrencies is not it, apparently. China has previously banned, restricted and curtailed crypto over the years, but this ban seems to be the final curtain. How will it all pan out? The country is assessing a CBDC, but only time will tell?
Spend Bitcoin and cryptocurrency trading in China
All forms of cryptoactivity – including, not surprisingly, spending your crypto – are now currently under China’s most concerted ban to date. China’s efforts to hinder or ban crypto activities have been many in the past but this time it even takes in mining, for which the country had the world’s foremost position. If you have crypto to spend, it’s unlikely you’ll be able to fritter it away.
Crypto trading & crypto law in China
China’s position as the world’s most active crypto mining country, and the volumes of cryptocurrency being trading by its population looks to be at an end following the government’s latest massive crackdown on all things crypto. China’s crypto crackdown activates a full-on ban on crypto transactions and mining to be implemented by the central bank and all prominent financial, securities and foreign exchange regulators. Cryptotrading, officially deemed illegal, now asks questions as to how the cryptoeconomy can recover in China and whether the loss of revenues derived from crypto mining will affect the government’s decision.
Paying tax on my crypto trading in the China
The latest ban on cryptocurrency trading follows a similar ban earlier in 2021, and some before that in 2017 and 2013. This ban appears to be more cogent, bringing into play the challenging and closing down of loopholes to eradicate the market for cryptocurrency. With this in mind, the issue of paying tax on your crypto trading in China doesn’t appear to be relevant at present and severe penalties for dealing with crypto are likely.
Tax relief, changing residency and gifting crypto coins China
China’s crackdown on what it sees as speculative cryptocurrency investment at best – and a way to launder money now renders all tax irrelevant. Trading crypto-currency had already officially been banned in China but continued through online foreign exchanges. To date, China’s government agencies have told banks and payment platforms to stop facilitating transactions and issued bans on mining. It is now illegal to trade and invest in cryptocurrency.
Crypto mining regulations in China
China’s latest – and most concerted – effort to ban crypto activity impacts across all activities, not least mining. China, once a world leader in crypto mining, now appears to have no interest in maintaining this position. China’s National Development and Reform Commission has vowed to restrict financial support and electricity supply for mining, ostensibly, it says, because it disrupts the country’s carbon neutrality goals.
Planning your retirement and investing in cryptocurrency in Austria
Far from cryptocurrency providing a means to save and invest for old age, or simply to get rich quick, the race is on with many organisations and individuals in China and Hong Kong to safeguard the assets they still have. To say that far-sighted crypto investment schemes are not on the menu at present would be something of an understatement.
China’s Financial services’ outlook on Bitcoin and crypto economy
The People’s Bank of China (PBOC) is fervent in its desire to clamp down on the growth of cryptocurrency trading and has issued a ban on overseas exchanges providing services to China-based investors. Also barred are the relevant financial institutions and payment facilitators which enable cryptocurrency trading nationally. With banks not allowed to process transactions and a crackdown on the infrastructure that supports crypto, it would be fair to say there will be no financial sector involvement or innovation in the cryptoeconomy for the time being
China and DeFi: the latest developments
Through its many agencies and institutions, China has expressed the view that speculation in cryptocurrency – trading – is a disruptive influence to the country’s economic and financial stability. More pertinent is that the cryptocurrency boom that took off in China is seen as a potential challenge to sovereign digital-yuan, which is being trialed. Either way, there looks to be no way financial services will be able to promote the growth of the cryptoeconomy at present. Following on from this, the development of exploration of decentralized finance (DeFi) as a potential technology within the established financial system looks a long way off.
Crypto regulation in China
The cryptoeconomy currency has been subject to crackdowns by the Chinese government over several years but the latest one looks to be the most concerted effort yet. Some point to the fact that China does not appreciate the untrammelled growth of a non-centralised financial currency system, or that crypto currency interferes with its own exploration of a state-backed digital yuan and central bank digital currency.
The reasons are many, but at present any issues of compliance seem redundant, except for complying not to trade, service or participate in any form of crypto activity outside of further developments. As a matter of course, state intuitions have warned buyers they would have no protection for continuing to trade cryptocurrency, and the government will be increasing its efforts to eradicate the crypto industry.
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