China’s Bitcoin ban

In September, the Chinese central bank and the country’s regulators suddenly announced a ban on crypto transactions in the country, a move that immediately saw the Bitcoin price fall by 9%.

“It wasn’t a huge surprise to see that China had taken that approach,” said Dr Henry Hillman. “When you look at the complexity of regulating cryptocurrency, it’s easier to take a very black-and-white approach, just saying well ‘if we ban all of this the problem goes away’.”

This appears to be the final escalation of a gradual tightening of China’s crypto rules. Over the summer, the government banned crypto mining from within the country. “China ultimately wants to have as much control over as many things as it possibly can,” said Michael McKee. If crypto were to continue growing in popularity in

China, the government would have less control over how people use their money.

Others have speculated the move could be a bid to reduce energy consumption in the country, which has faced shortages. Or even to head off a rival to the government’s own digital currency, the “Digital Yuan”, which is currently being trialled in several regions as a replacement for cash.

“I don’t think most countries will go down the blanket ban road,” said McKee. And despite the dramatic move, the industry does not seem hugely concerned China’s move could be replicated elsewhere either.

“We’ve been through the China ban on Bitcoin a number of times,” said Danny Scott. “I think we’re all kind of used to it by now. It’s almost a meme now.”