China is known for its strict Internet rules: the Great Firewall of China has been giving tourists troubles for long years. The government of the country is extremely experienced in restricting the access of its citizens to the resources that contradict with local policy. This time the Chinese financial authorities have launched a crusade against overseas crypto exchanges.
Over 120 trading platforms that offer services to Chinese domestic investors are expected to get blocked in the nearest future. The authority in charge is the China National Fintech Risk Rectification Office which was created in 2016. This country has developed a special agency to tackle all the financial risk issues associated with the crypto world. Its sphere of interest is wide: from ICOs to peer-to-peer lending.
The free access to major exchanges is already a problem for the Chinese: such giants as Binance, OKEx, and Bitfinex are unavailable via local IP addresses. At least 124 platforms that have already been identified by the Fintech Risk Rectification Office will suffer the same fate. All these actions are not random – China is building its special local crypto sphere.
One of the most significant decisions of the Chinese authorities was the ban of ICOs announced by the People’s Bank of China in September 2017. Not only it blocked the crypto trading platforms – it caused the round of China-based exchanges getaway. Both influential companies and average people were damaged by the crypto policy of the country. The local authorities of Chinese mountain region Xinjiang have promised to take over illegal miners by the end of this summer. What is more, the news on the trading platforms blocking were followed by the note that domestic websites and official accounts on WeChat , the Chinese top messaging app, are also getting banned in case they offer crypto trading or ICO services. One more object of interest of the China National Fintech Risk Rectification Office is third-party payments vendors suspected in using cryptos.
The official position is crystal clear and can be characterized by the statement of the deputy governor of the previously mentioned People’s Bank of China: “any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface.” But it would be wrong to say that China is afraid of the new technology and does not understand the potential of blockchain.
China is not welcoming the foreigners who want to take over its crypto sphere, but the country has officially supported the choice of blockchain as the basic technology for the future digital economy. Even the People’s Bank of China known for decisive anti-crypto actions has submitted 41 cryptocurrency-related patent applications. It seems to be nonsense but the fact is that one of the most crypto-unfriendly countries may become the leader in integrating cryptocurrency in the existing financial system.