The recent investigation into Yao Qian, the former director of the Central Bank Digital Currency (CBDC) development at China’s central bank, signifies a continuing and profound crackdown on cryptocurrency activities within the country. This incident underscores the Chinese government’s uncompromising stance on controlling the cryptocurrency space, a policy trajectory that has been consistent over the years.
Since 2017, China has escalated its restrictions on the crypto sector, citing concerns over financial risks and economic order. This has involved comprehensive bans on crypto trading and stringent actions against cryptocurrency mining within the country. The People’s Bank of China (PBOC) and other regulatory bodies have repeatedly issued notices that underscore the illegality of crypto-related transactions, emphasizing the risks associated with money laundering, illegal fundraising, and other criminal activities that they argue cryptocurrencies facilitate.
In 2021, a major regulatory announcement solidified the prohibition of service provision by overseas cryptocurrency exchanges to Chinese residents, emphasizing that such activities were considered illegal financial activities. This extended to Chinese nationals working for these exchanges, even if based overseas, and clarified severe legal repercussions for such involvement.
This broad and intense regulatory framework has significantly impacted global cryptocurrency markets, often leading to drops in the prices of major cryptocurrencies like Bitcoin whenever new regulations are announced. Furthermore, the crackdown has pushed Chinese crypto businesses and miners to move their operations overseas, seeking environments with more favorable regulatory frameworks.
In response to these stringent measures, some regions like Hong Kong have attempted to carve out a more crypto-friendly stance. However, the overarching theme from the mainland government remains one of tight control and regulation, reflecting broader geopolitical and economic strategies to stabilize the national currency and financial systems against what it perceives as the speculative and destabilizing nature of cryptocurrencies.
China’s strategy appears to focus not just on direct regulation, but also on fostering a controlled integration of blockchain technologies, aiming to leverage its benefits while avoiding the pitfalls of unregulated digital currencies. The crackdown on cryptocurrencies also coincides with the country’s efforts to introduce its own digital yuan, suggesting an approach aimed at centralizing and controlling fintech innovations rather than allowing a decentralized ecosystem to flourish.
Notice:
The views and opinions expressed in this article are solely those of the author and do not necessarily mirror the views and policies of the Secret3 platform or the wider DAO community. Readers are encouraged to exercise discernment and to consider the content as the author’s personal insights and opinions.