Data from the People’s Bank of China (PBOC) has revealed how a series of sweeping measures on Bitcoin abruptly halted trading in the cryptocurrency, with the yuan now representing only one percent of overall global transactions.
Chinese authorities banned initial coin offerings (ICOs) in September 2017, and stopped direct trading between the yuan and virtual currencies, including Bitcoin.
Before the enforced closure of Chinese crypto exchanges, as many as 90 percent of Bitcoin trades were being conducted using the yuan.
Talking to Xinhua, Zhang Yifeng, a blockchain analyst at Zhongchao Credit Card Industry Development Company, said “timely moves by regulators effectively fended off the impact of sharp ups and downs in virtual currency prices and led the global regulatory trend.”
Bitcoin peaked above 20,000 US dollars in late 2017, but has since slumped to prices of around 6,500 US dollars.
At the time of China’s ban on ICOs and closure of exchanges, authorities warned of “high risks” to investors.
According to Global Times, China has no plans to ease restrictions on trading in cryptocurrencies, with Guo Dazhi, research director at the Zhongguancun Internet Finance Institute, warning “the fluctuation for Bitcoin has been huge and obviously that is very risky for investors.”
Guo said “the policy has been very successful,” after Xinhua reported that 88 cryptocurrency exchange platforms and 85 initial coin offering (ICO) exchanges have been shut down, without causing any risks, since last September.
While restrictions on Bitcoin and other cryptocurrencies remain tight, China has been developing its own blockchain-based technology, filing more patents than any other country in 2017.
According to Xinhua, former governor of the PBOC Zhou Xiaochuan, who retired earlier this year, said on the sidelines of the annual session of the National People's Congress in March that while China was “in no hurry” to establish its own cryptocurrency, the development of digital currencies was “technologically inevitable.”
Nicholas Moore
