China, home to the world’s biggest community of bitcoin miners, is cracking down on cryptocurrency activity — more so than most other major economies. From a halt to virtual currency trading on domestic exchanges to
banning initial coin offerings, regulators have taken a proactive role in shaping the stratospheric rise of bitcoin and its peers.
The country’s moves come as President Xi Jinping targets financial risk in the economy following a decade of booms and busts in everything from stocks to real estate. The result: China’s once-dominant role in the world of cryptocurrencies is shrinking.
First it banned initial coin offerings, or ICOs — the equivalent of initial public offerings for new virtual currencies — in September. Then it called on local exchanges to
stop trading in cryptocurrencies.
In January, authorities outlined proposals to
discourage bitcoin mining — the energy-intensive computing process that makes transactions with the digital currency possible. Then Beijing-based Renren Inc. was
said to cancel a planned overseas ICO after authorities moved to stop Chinese companies listed abroad skirting its domestic ban on such offerings. Bitcoin and its peers can still be traded, but only in over-the-counter markets, a slower process that some analysts say increases credit risk.
There’s been no explicit explanation, but cleansing risk from financial markets has been the
government’s mantra for more than two years now. Last year saw regulators clamp down on everything from excessive borrowing to equity speculation and in October, at the Communist Party Congress, leaders again pledged to make controlling risk a top priority. Read more from bloomberg.com…
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